Saudi Arabia and other OPEC+ oil producers, on Sunday, unexpectedly announced additional cuts to oil production of over 1.16 million barrels per day. Analysts predicted an immediate increase in prices, and the US deemed the action unwise.
The pledges raise the overall amount of cutbacks by OPEC+, which includes Russia and other allies, to 3.66 million bpd, or 3.7 percent of global demand.
Russia’s deputy prime minister also said Moscow would extend a voluntary cut of 500,000 barrels a day until the end of 2023. The United Arab Emirates, Kuwait, Iraq, Oman and Algeria said they would voluntarily cut output over the same time period.
The UAE said it would cut production by 144,000 bpd, Kuwait announced a cut of 128,000 bpd while Iraq said it would cut output by 211,000 bpd and Oman announced a cut of 40,000 bpd. Algeria said it would cut its output by 48,000 bpd.
The Saudi energy ministry said in a statement that the kingdom’s voluntary cut was a precautionary measure aimed at supporting the stability of the oil market.
The event on Sunday occurs the day before a virtually convened meeting of an OPEC+ ministerial panel, which also includes Saudi Arabia and Russia, and which had been anticipated to maintain the 2 million bpd oil curbs already in place through the end of 2023.