Saudi Arabia said on Thursday that it will extend a voluntary oil output cut of one million barrels per day for another month, including September, and that it could be extended further or deepened.
9M barrels per day
According to an official source at the energy ministry, the kingdom’s production for September will be around 9 million barrels per day (bpd).
“This additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets,” the source said. He added that the cut could be “extended, or extended and deepened,” hinting at further market tightening.
Russia will also reduce oil exports by 300,000 barrels per day in September, according to Deputy Prime Minister Alexander Novak, who spoke shortly after the Saudi announcement.
At its most recent policy meeting in June, OPEC+ agreed on a broad agreement to limit supply through 2024, and Saudi Arabia pledged a voluntary production cut for July, which it has since extended to include August.
On Friday, an OPEC+ panel, comprised of members of the Organization of Petroleum Exporting Countries (OPEC) and allies led by Russia, will meet.
According to sources, the Joint Ministerial Monitoring Committee is unlikely to change oil policy at its meeting on Friday.
OPEC+, which produces roughly 40% of the world’s crude, has been limiting supply to support the market since late 2022.
Brent crude futures were up 42 cents to $83.62 a barrel by 1328 GMT, reversing an earlier decline following the Saudi announcement.
According to OPEC+ sources, the Saudi voluntary cut announcement for July came as a surprise at the June OPEC+ meeting in Vienna, where Riyadh shared little or no detail on the measure with other delegations prior to the announcement.
According to Saudi Energy Minister Prince Abdulaziz bin Salman, OPEC+ will “continue the effort at surprising markets” and do “whatever is necessary” to balance them.
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