Saudi Arabia and OPEC+ producers have recently announced a surprising cut to oil production. The move to cut production by around 1.6 million barrels per day is said to be a move to stabilize the market.
The current product cut is different than what was expected to be agreed upon during the meeting, which includes Saudi Arabia and Russia. The earlier expected production cut was 2 million bpd.
The announced voluntary reductions in production, scheduled to commence in May, are surprising and supplement previously established cuts agreed upon in October. Official statements indicate that Riyadh will curtail output by 500,000 bpd, while Iraq will decrease its production by 211,000 bpd.
The United Arab Emirates has announced a cut of 144,000 bpd, while Kuwait will decrease its output by 128,000 bpd. Oman has also declared a cut of 40,000 bpd, and Algeria will reduce its production by 48,000 bpd. Additionally, Kazakhstan has plans to decrease its output by 78,000 bpd.
What impact will this cut in Saudi Arabia’s production have on the US as a whole? Will gas prices surge in the US? What impact will it have on the current Ukraine and Russian war? We will keep you posted on all of the latest updates.