Oil-producing countries grouped under OPEC+ Sunday announced a voluntary cut in crude output of around 1.15 million barrels per day (bpd) in addition to a 2-million reduction agreed upon in October to boost prices, it was reported. The measure will come into effect in May and last until the end of this year.
Last October, OPEC+, which comprises the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, agreed to production cuts of 2 million bpd from November despite US objections claiming that the world needs lower prices to support economic growth and also to prevent Russian President Vladimir Putin from raising more funding for the Ukraine war.
Riyadh said it would cut output by 500,000 bpd, while Iraq will reduce its pumping by 211,000 bpd, according to official statements. The United Arab Emirates said it would reduce output by 144,000 bpd, Kuwait announced a cut of 128,000 bpd while Oman announced lower pumping by 40,000 bpd and Algeria would cut by 48,000 bpd. Kazakhstan will also cut production by 78,000 bpd.
Russian Deputy Prime Minister Alexander Novak said Sunday that Moscow would extend a voluntary 500,000 bpd cut until the end of 2023. Moscow announced those cuts unilaterally in February following the introduction of Western price caps.
The Saudi Energy Ministry said in a statement that the kingdom's voluntary cut was a precautionary measure aimed at supporting oil market stability.
Oil prices fell to 15-month lows in response to the banking crisis that followed the failure of two US lenders and resulted in the bailout of Credit Suisse by Switzerland's largest bank, UBS.