The operation will last until July, but it may be extended.
Saudi Arabia cut its crude oil production by one million barrels per day, the country announced on Sunday. The operation will last until July, but it can be extended, Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman said.
The announcement came in connection with the joint Opec+ meeting of the Organization of the Petroleum Exporting Countries Opec and its allies.
In March of this year, Saudi Arabia produced more than ten million barrels of crude oil per day, according to the country’s statistics authority. The million barrel cut in daily production is therefore significant.
A barrel is a unit of measurement in the oil market. Its volume is 159 liters.
OPEC+ already decided in April to cut crude oil production by more than a million barrels per day. It raised the world market prices of crude oil only for a moment. Since April, the price of crude oil has fallen by about ten percent. For example, the price of Brent quality has been around USD 75 per barrel in recent days.
A year ago, the price of Brent quality hovered around $120 per barrel. Since then, prices have fallen, as Russia’s attack on Ukraine has plunged the global economy into an unstable state.
Analysts at Germany’s Commerzbank said ahead of the Opec+ meeting that Saudi Arabia needs higher prices to balance its budget. According to analysts’ estimates, Saudi Arabia should receive at least around 80 dollars per barrel for its crude oil.
The concern of oil traders is the freezing of demand, when, for example, the United States and the EU are struggling with inflation and high interest rates, and at the same time the recovery of the Chinese economy after the pandemic is coughing.
Opec and its allies, including Russia, decided on Sunday that their crude oil production in 2024 will total 40.46 million barrels per day. The amount of daily crude oil barrels required from Saudi Arabia will be 10.48 million per day next year.
Russia is required to produce 9.83 million barrels per day next year, but the figure may still be updated.
#Opec #Saudi #Arabia #cutting #crude #oil #production #million #barrels #day
