Saudi Arabia and Russia extended their cuts until the end of the year
Both nations announced the extension of their voluntary oil production cuts
Saudi Arabia and Russia announced the extension of their voluntary oil production cuts until the end of the year, which has had an immediate impact on crude oil prices. This decision seeks to stabilize prices and has taken the value of a barrel of Brent and WTI to their highest level since November.
Riyadh, the world’s main oil exporter, began a reduction in its production of one million barrels per day (mbd) in July. The Saudi Ministry of Energy confirmed that it will maintain this policy until December, as part of its commitment previously announced at the June meeting of the Organization of Petroleum Producing Countries (OPEC), led by Saudi Arabia and with the participation of allies such as Russia.
Russia also said it will continue to voluntarily reduce its oil exports by 300,000 bd until the end of the year.
Following these announcements, crude oil prices have reached highs not seen since last November. At 3:45 p.m. GMT, a barrel of North Sea Brent for delivery in November increased 2.34% to $91.08, having reached $91.15 during the day. Meanwhile, the US benchmark, the West Texas Intermediate (WTI) barrel for October, recorded an increase of 2.84% to $87.98, reaching $88.07 during operations.
Saudi Arabia highlighted that the fundamental objective of this policy is to “support the stability and balance of the oil markets” and has announced that its production for the months of October, November and December will remain at around 9 million barrels per day, with the possibility of reviewing this strategy monthly to adjust production according to market conditions.
Russian Deputy Prime Minister Alexander Novak, in charge of the Energy portfolio, has stated that this measure seeks to “strengthen the precautionary measures taken by OPEC+ countries to maintain the stability and balance of the oil markets.” Both countries have stressed that production cuts will be reviewed monthly based on market conditions, which experts say allows Saudi Arabia to maintain control of the oil market.
K. Tovar
Source: Bancaynegocios
(Referential image source: Maria Lupan, Unsplash)
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