Gulf states and Russia to cut oil output by more than 1 million barrels per day

Saudi Arabia, Riyadh:

Despite U.S. pressure to increase crude output, Saudi Arabia on Sunday led major oil majors in coordinating production cuts, saying they aimed to stabilize the market.

Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, Algeria and Oman will collectively cut output by more than 1 million barrels per day from May to the end of the year, the largest reduction since the OPEC+ cartel cut output by 2 million barrels per day in October.

Russia, a member of OPEC+, said it would also extend its 500,000 bpd production cut until the end of the year, calling it “responsible precautionary action”.

Saudi energy ministry officials “emphasized that this is a precautionary measure aimed at supporting the stability of the oil market,” the official Saudi Press Agency said.

The cuts were made public in a series of statements by different countries.

OPEC and its allies including Russia made the controversial decision in October, known collectively as OPEC+, to cut output by 2 million barrels per day.

The drop was the biggest since the peak of the Covid-19 pandemic in 2020, despite fears it would stoke inflation and push the central bank to raise interest rates further.

“This voluntary move is a precautionary measure to ensure market balance,” UAE Energy Minister Suhail bin Mohammed Al Mazrouei said, according to the official WAM news agency on Sunday.

Saudi Arabia will cut production by 500,000 bpd, Iraq by 211,000 bpd, the UAE by 144,000 bpd, Kuwait by 128,000 bpd, Algeria by 48,000 bpd and Oman by 40,000 bpd, each announced.

U.S. seeks more output

The statements came a day before OPEC+ is due to hold a meeting of its joint ministerial oversight committee via video conference on Monday, according to the UAE.

The cuts were announced despite calls from the United States to boost output as consumption increases and China, the world’s largest oil consumer, reopens after a Covid shutdown.

“As the world economy recovers, we’re going to see more consumption. So we want to see supply meet demand,” U.S. Undersecretary of State for Economic Affairs, Energy and the Environment Jose Fernandez said during CERAWeek in Texas last month. Energy Conference in Houston, State.

“We want to see more” global crude supply, including from OPEC+, Fernandez said.

OPEC+ is made up of 13 members of the Organization of the Petroleum Exporting Countries and 11 non-OPEC allies.

U.S. President Joe Biden has often called for more output from OPEC+ after Russia’s invasion of Ukraine sent oil prices soaring.

OPEC also raised its forecast for world oil demand in 2023 in February, saying it expects demand to grow by 2.3 million barrels per day this year to an average of 101.87 million barrels per day.

(Aside from the title, this story is unedited by NDTV staff and published via a syndicated feed.)