Saudi Arabia announced a significant reduction in oil production

Saudi Arabia has announced to reduce oil production in July under the OPEC agreement to increase oil prices. Saudi Arabia has announced significant production cuts as part of the OPEC Plus deal.

According to the Saudi Press Agency, Saudi Energy Minister Prince Abdulaziz bin Salman said after the OPEC Plus meeting in Vienna that if necessary, the country’s daily production cut of up to 1 million barrels can be extended after July.

Ministers and top officials from the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, and allies led by Russia, held a seven-hour meeting in Vienna on production targets and concluded a lengthy discussion. The latter has agreed to an agreement on production policy. Under this, the group has decided to further reduce the overall production targets to 1.4 million barrels per day from 2024.

Note that many of these cuts will not materialize as the group has reduced targets for Russia, Nigeria and Angola to bring them in line with their actual current production levels. Production has been allowed to increase.

Saudi Arabia, for its part, will extend voluntary cuts of 500,000 barrels per day until 2024. It is not clear whether the 1 million bpd cut in July is in addition to the earlier 500,000 bpd or if it will be included in the 1 million bpd cut in July.