Saudi Arabia will continue to cut oil production by one million barrels per day (bpd) for “an additional three months”, from October to December 2023, maintaining its strategy to support crude prices, announced Tuesday the Ministry of Energy. The cuts from the world’s top crude exporter were announced in June following an OPEC meeting and first took effect in July. OPEC brings together members of the Organization of Petroleum Producing Countries (OPEC), led by Saudi Arabia, and allied states including Russia.
“The kingdom’s production for the months of October, November and December will be around nine million bpd,” the ministry said in a statement. According to him, this strategy will be “re-examined monthly with a view to further reducing production or increasing it”. This policy is intended to “support the stability and balance of oil markets”, he added. Ryad had announced an extension for September, warning that it could be “strengthened” beyond.
The unilateral Saudi production cut follows several OPEC members’ decision in April to cut production by more than a million bpd, which briefly supported prices, without allowing a sustained recovery. Oil prices firmed in July, the first month the Saudi cut took effect, crossing the $80-a-barrel threshold the kingdom needs to balance its budget, analysts said.
“The additional cuts do appear to have boosted prices and supply looks tight in the fourth quarter despite increased production from Iran and some other countries,” Justin Alexander, cabinet director, told AFP. Khalij Economics consultancy. “However, this effort came at a cost to the kingdom, which reduced its offer,” he added. The world’s top crude exporter’s daily output is around nine million bpd, well below its daily capacity, officially 12 million bpd.
