OPEC, Allies to Voluntarily Cut Oil Production Until End of 2023.
(MENAFN) Saudi Arabia and other members of the Organization of the petroleum Exporting Countries (OPEC) and their allies have decided to voluntarily reduce their oil production from May until the end of 2023. According to the Saudi Press Agency, Saudi Arabia will reduce its oil output by 500,000 barrels per day, with Russia extending a voluntary cut of 500,000 bpd until the end of 2023. Other countries that will also cut their output over the same period are the UAE, Kuwait, Iraq, Oman, and Algeria. The UAE will cut production by 144,000 bpd, Kuwait by 128,000 bpd, Iraq by 211,000 bpd, Oman by 40,000 bpd, and Algeria by 48,000 bpd.
The Saudi Energy Ministry stated that the voluntary cut is aimed at supporting the stability of the oil market. This move by Saudi Arabia, Iraq, the UAE, Kuwait, Algeria, and Oman will result in a total cut of more than 1 million barrels per day, which is the largest reduction since OPEC+ cut 2 million barrels per day in October last year. The UAE Energy Minister, Suhail bin Mohammed Al-Mazrouei, described the initiative as a precautionary measure to ensure market balance.
According to the head of investment firm Pickering Energy Partners, Dan Pickering, OPEC's unexpected 1.15 million bpd production cut could lift global oil prices by USD10 per barrel. The output reduction will firm prices significantly, he said. He added that there will probably be a USD10 per barrel move in crude. This reduction in output is expected to have a positive impact on the oil market, as it would help balance supply and demand, which would ultimately lead to higher prices.
The decision to cut oil production voluntarily by OPEC and its allies reflects the ongoing efforts by oil-producing countries to balance the oil market and stabilize prices. This move signifies the importance of international cooperation among oil-producing countries to support the stability of the oil market.
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