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Saudi Arabia, Russia to continue voluntary oil cuts

October 4, 2023 at 1:41 pm

An OPEC sign [Stefan Wermuth/Bloomberg via Getty Images]

Saudi Arabia and Russia today said they were continuing voluntary oil cuts to year-end as tightening supply and rising demand support oil prices, Reuters reports.

The Saudi and Russian statements come hours before a ministerial monitoring panel of the OPEC+ group of leading oil producers convenes online.

The panel, called the Joint Ministerial Monitoring Committee, can call for a full OPEC+ meeting if warranted but sources have told Reuters it is unlikely to tweak current oil output policy.

Oil prices continued a downward trend directly following the news with Brent futures falling $1 to $89.92 a barrel but they were trading at $90.40 a barrel by 08:54 GMT.

OPEC+, which comprises the countries of the Organisation of the Petroleum Exporting Countries (OPEC) and leading allies including Russia, has been cutting output since last year in what it says is preemptive action to maintain market stability.

The US and Western allies have argued that the world needs lower prices to support economic growth and the global economy.

Saudi Arabia, the OPEC de facto leader, said it would continue with its voluntary oil output cut of one million barrels per day (bpd) for the month of November and until the end of the year and that it would review the decision again next month.

READ: Saudi Arabia, Russia extend voluntary oil cuts to year-end, markets jump

The kingdom’s production for November and December will be approximately nine million bpd, the energy ministry said in a statement.

“This voluntary cut decision will be reviewed next month to consider deepening the cut or increasing production,” the statement said.

Saudi Arabia first implemented the additional voluntary cut in July and has been renewing it monthly. It said in Septembethe cut would last until year end but would be reviewed on a monthly basis.

Russia in August said it would reduce exports by 300,000 bpd until the end of this year.

The Saudi and Russian additional voluntary cuts come on top of April cuts agreed by them and several OPEC+ producers, which extend to the end of 2024.