The kingdom of Saudi Arabia and other oil-producing countries have announced plans to cut production by 1.15 million barrels per day (bpd) from May till the end of the year.
The decision, which may significantly affect oil prices globally, is coming ahead of the monthly meeting of the Organisation of Petroleum Exporting Countries (OPEC).
Oil price recently fell to $72 a barrel for the first time since December 2021.
In a statement by Saudi Arabia’s energy ministry, the country’s cut of 500,000bpd would be in combination with some OPEC+ and non-OPEC members.
The ministry described the move as a “precautionary measure”, adding that it is aimed at stabilising the oil market.
It also said the cuts, which represent less than 5 percent of Saudi Arabia’s average production of 11.5 million bpd in 2022.
The ministry added that the cut is in addition to the reduction already made in October 2022.
In official statements released by each country, Iraq said it would reduce production by 211,000 bpd, the United Arab Emirates (UAE) pledged to cut output by 144,000 bpd; Kuwait by 128,000 bpd; Kazakhstan by 78,000 bpd; Algeria by 48,000bpd; and Oman by 40,000 bpd.
In October 2022, OPEC and its allies agreed to cut oil output by 2 million barrels per day in November — its deepest cut since the 2020 COVID-19 pandemic
Meanwhile, in February, the global oil cartel said it would maintain its current production levels as prices fell to $82 a barrel.
The US had pressured the organisation to suspend its plans for a deep cut.
However, OPEC+ had said the decision was in the light of the uncertainty that surrounds the global economic and oil market outlooks and the need to enhance the long-term guidance for the market.
