A reliable source within the Saudi Ministry of Energy announced on Wednesday that Riyadh is “continuing with the voluntary cut of one million barrels per day,” which began in July last year and was later extended until the end of December of the current year.
As a result, Saudi Arabia’s production in November and December will be nearly nine million barrels per day.
The source revealed to the official news agency WAM that “the decision to continue this reduction will be reviewed next month to consider increasing the cut or boosting production.”
It’s important to note that this voluntary reduction is in addition to the voluntary cut announced by the Kingdom in April 2023, extending until the end of December 2024.
The source emphasized that “this additional voluntary cut is intended to bolster the precautionary efforts undertaken by the OPEC+ alliance to support the stability and balance of petroleum markets.”
About a week ago, the energy consulting group Rapidan predicted that Saudi Arabia would gradually move away from its policies of reducing oil production after Brent crude oil prices, the global benchmark, surpassed $90 per barrel.
According to Bloomberg, Saudi Arabia pushed Brent crude to around $100 per barrel by cutting production at a time when global fuel demand reached record levels.
The Wall Street Journal previously stated that “Saudi-Russian oil reduction policy is fraught with risks,” but it is bearing fruit as production cuts have led to rising crude prices.
The financial flows from Saudi Arabia’s black gold production help finance massive transformative projects led by Crown Prince Mohammed bin Salman.
The OPEC+ alliance expects a global oil deficit of 3.3 million barrels per day in global oil supplies during the fourth quarter, leading many oil analysts to believe that Brent crude will soon exceed $100 per barrel.
Livia Gallarati, an oil market analyst at Energy Aspects, said, “Prices will rise sharply… supply is tight fundamentally.”
