Oil prices increased as Saudi Arabia announced on Monday that it would extend its voluntary one million barrel per day (bpd) oil output cut for one additional month, to cover August.
Saudi Arabia extends oil output: According to an official source from the Ministry of Energy, the kingdom’s output for the month of August 2023 will be around to 9 million barrels per day.
The source also mentioned that the voluntary decrease might continue past August.
Alexander Novak, the deputy prime minister of Russia, added that his nation would reduce its oil shipments by 500,000 barrels per day in August shortly after the Saudi statement.
The Saudi voluntary cut comes on top of a prior voluntary cut that the country and other OPEC+ members announced in April and lasts until December 2024.
On top of a larger OPEC+ agreement to limit supply until 2024, Saudi Arabia, the de facto leader of OPEC, had earlier this month promised to significantly reduce its output in July as the club moved to support falling oil prices.
Brent jumped 85 cents to $76.26 per barrel by 0915 GMT on news of the Saudi drop, outpacing worries over a slowing global economy and potential future interest rate increases from the U.S. Federal Reserve.
The Organisation of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia, pump around 40% of the petroleum used in the world’s energy supply.
“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,” an official source from the SPA was cited as saying.