Saudi Arabia’s Impact Oil Prices Reach New Heights on Extended Cuts
Global oil prices experienced an upward surge on Thursday following Saudi Arabia’s announcement of extending its voluntary one million barrel per day output cut for an additional month until the end of September, as reported by Reuters.
As per the Saudi Press Agency (SPA), the Kingdom’s production for September will hover around 9 million barrels per day. An official source from the Ministry of Energy stated that this cut could be further “extended, or extended and deepened.”
The source emphasized that this extension complements the precautionary measures taken by OPEC Plus — a coalition of the Organization of the Petroleum Exporting Countries (OPEC) and its allies — with the primary objective of bolstering the stability and equilibrium of oil markets.
In addition to this recent voluntary extension, the source affirmed that it builds upon the previous voluntary cut announced by Saudi Arabia in April 2023, which is set to continue until the culmination of December 2024.
In June, OPEC+ collectively agreed to a comprehensive accord to curtail oil supply through 2024. Saudi Arabia subsequently committed to an extra voluntary reduction for the month of July.
Having recently prolonged the cut to encompass August, Saudi Arabia’s decision to extend the reduction through September was widely anticipated.
As a result of this news, Brent crude futures observed a rise of 42 cents, reaching $83.62 per barrel by 1328 GMT, while US West Texas Intermediate crude also increased by 47 cents to $79.96.
Both benchmarks exhibited an initial increase of over $1 earlier during the trading session.
