The Opec+ group has decided to extend output cuts into the next year, in an attempt to face the surging prices and a looming supply glut.
During a meeting in Vienna of member countries – which include the big producers Saudi Arabia, Iraq, and Russia – the oil cartel agreed to lower its output by 1.4m barrels a day.
Saudi’s energy ministry highlighted that the Kingdom’s output would drop to 9 million barrels per day (bpd) in July from around 10 million bpd in May, marking the biggest reduction in years.
Meanwhile, a White House official stated that the Biden administration is focused on oil prices and “not barrels” after Saudi Arabia’s announcement.
“We are focused on prices for American consumers, not barrels, and prices have come down significantly since last year,” the official mentioned.
“As we have said, we believe supply should meet demand and we will continue to work with all producers and consumers to ensure energy markets support economic growth and lower prices for American consumers.”