RIYADH: Saudi Arabia, the world’s biggest oil exporter, has decided to extend the voluntary oil output reduction of 1 million barrels per day (bpd) in oil output through September.
The state-run news agency cited an official from the Kingdom’s Ministry of Energy, and reported that as a result of this decision, Saudi Arabia’s oil production for September is expected to be around 9 million bpd.
It is worth noting that this extension comes in addition to the voluntary oil output cut that was initially announced in April 2023. Under this plan, the reduction will now remain in effect until the end of December 2024.
The decision to extend the output cut was taken during the June policy meeting of the Organization of the Petroleum Exporting Countries and its allies, commonly known as OPEC+. As part of the broader agreement reached during the meeting, Saudi Arabia had pledged a voluntary production cut for the month of July, which was later extended until August.
Oil Output Reduction to Bring Market Stability
The news of this extension surfaced just hours before the scheduled OPEC+ meeting on Friday. OPEC+ collectively contributes to around 40 percent of the world’s crude oil production and has successfully cut its output target by approximately 3.66 million bpd, equivalent to about 3.6 percent of global demand.
Saudi Energy Minister, Prince Abdulaziz bin Salman, highlighted the significance of having trust in OPEC+ and commended the organization as the most effective international body working towards restoring market stability.
He explained that the decision to extend the output cut was a precautionary measure taken in response to the prevailing uncertainties in the oil market.
Likewise, the UAE’s Minister of Energy and Infrastructure, Suhail bin Mohammed Al Mazrouei, in July reiterated OPEC+’s commitment to ensuring stability in the oil market by maintaining a balance between supply and demand fundamentals.
