By Sibel Morrow
Saudi Arabia and Russia, announced on Tuesday their plan to extend existing output cuts until the end of 2023, with possible monthly revisions.
OPEC group’s swing producer Saudi Arabia said it extended its production cut of 1 million barrels per day (bpd) for another three months to cover October, November and December, the official Saudi SPA news agency reported, citing Energy Ministry sources.
The pledged reduction is an extension of the country’s existing 1 million bpd and "will be reviewed monthly to consider deepening the cut or increasing production," it said.
With the latest cut, the total production of the world’s largest exporter of crude oil will be approximately 9 million bpd in October, November and December.
The cut is "in addition to the voluntary cut previously announced by the Kingdom in April 2023, which extends until the end of December 2024,” according to the news agency.
The additional voluntary cut aims to support the stability and balance of oil markets, it added.
Last month, Saudi Arabia stated that it would extend its existing 1 million barrels per day (bpd) of output cutbacks through September. The country originally reduced output in July and extended it through August and September.
- Russia follows suit
Russia also announced its intention to continue its voluntarily oil export reduction by around 300,000 bpd during the rest of 2023.
Likewise, Russia announced it would continue to voluntarily reduce oil exports. Russia reduced oil exports by 500,000 bpd in August and 300,000 bpd in September.
The new reductions were additions to the group’s already-existing output cap of around 2 million bpd announced in October 2022 and 1.6 million bpd announced in May.
The price of Brent hit $90.58 per barrel soon after Saudi Arabia and Russia announced their decisions, posting an 1.77% daily increase.
American benchmark West Texas Intermediate (WTI) also climbed to $87.48 per barrel at the same time, recording 2.2% gain.