Saudi Arabia reduces oil production to raise prices
Saudi Arabia announced on Sunday that it would reduce its oil supplies to the global economy in a bid to support prices.
The announcement came after hours of negotiations at a meeting of OPEC+ – the grouping of the 13 members of the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and the group’s 10 partners, led by Russia.
The meeting was closely watched as difficult, with Russia looking to maintain production levels and Saudi Arabia trying to raise prices.
OPEC+ producers agreed at their meeting in Vienna to extend past production cuts into next year, while the Saudi decision to cut 1 million barrels per day (bpd) was a unilateral step.
What did Saudi Arabia say?
Saudi Arabia’s production will fall to 9 million bpd in July from around 10 million bpd in May.
The country’s energy minister, Prince Abdulaziz bin Salman, told reporters that Riyadh’s latest cut is “extendable”.
OPEC+ producers “will do whatever is necessary to bring stability to this market,” he added.
“This is a Saudi lollipop,” said the prince. “We wanted the icing on the cake. We always want to add suspense. We don’t want people trying to predict what we do… This market needs stabilization.”
Why is Saudi Arabia cutting oil production?
Oil producers have suffered from falling prices and high market volatility due to Russia’s war in Ukraine.
Source: DW
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