Saudi Arabia has said it will reduce how much oil it sends to the global economy by one million barrels per day (bpd), as the OPEC+ alliance of major oil-producing countries faces flagging oil prices and a looming supply glut.
The kingdom said on Sunday that it would make these production cuts in July to support the sagging cost of crude after two earlier production cuts by OPEC+ members failed to push prices higher, Al Jazeera reported.
OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, reached a deal on output policy after seven hours of talks at its headquarters in Vienna and agreed to extend earlier cuts in supply through the end of 2024 by a further total of 1.4 million barrels per day.
“This is a grand day for us, because the quality of the agreement is unprecedented,” Saudi Arabia’s Energy Minister Abdulaziz bin Salman said in a news conference, adding that the new set of production targets is “much more transparent and much more fair”.
He also said that the cut by Riyadh could be extended beyond July if needed.
The Al Jazeera report said however, many of these reductions will not be real as the group lowered the targets for Russia, Nigeria, and Angola to bring them into line with their actual current production levels.
In contrast, the UAE was allowed to raise output, the report said.
OPEC+ pumps around 40 percent of the world’s crude, meaning its policy decisions can have a major impact on oil prices.
It already has in place a cut of 2 million bpd agreed to last year and amounting to 2 percent of global demand.
However, those cuts gave little lasting boost to oil prices.
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