Saudi Arabia has announced that it will extend its voluntary oil production cut measures for an additional month until the end of August. The daily oil production during this period is expected to be around 9 million barrels.
According to a report from the Saudi Ministry of Energy, this extension comes as part of Saudi Arabia’s “precautionary efforts” to stabilize and balance the market. It is an additional reduction on top of the voluntary production cuts that were previously announced in April.
The decision reflects the weak demand for spot crude oil in the market, as stated by Faisal Fayek, a Saudi energy expert, in an interview with local media. The extension of the production cuts is an attempt to address this situation and maintain market stability.
In April, Saudi Arabia had already announced an average daily cut of 500,000 barrels of oil production from May until the end of the year. Then, on June 4, after the 35th “OPEC+” ministerial meeting, the country announced an additional reduction of 1 million barrels per day for the month of July.
The Saudi Arabian News Agency reported that the extension of the production cuts will continue until the end of August, with a possibility of further extensions. This decision is part of Saudi Arabia’s ongoing commitment to supporting the stability and balance of the global oil market.
The impact of these extended production cuts will be closely monitored by market participants and industry experts. The expectation is that the measures will contribute to a reduction in the global oil supply, which could potentially lead to a stabilization of oil prices in the coming months.
The news of the production cut extension comes at a time when the oil market is facing unprecedented challenges due to the COVID-19 pandemic. The drop in demand, coupled with supply concerns, has resulted in significant volatility in oil prices. The actions taken by Saudi Arabia, as one of the world‘s leading oil producers, aim to address these challenges and restore stability to the market.