OPEC+ countries unexpectedly announced a reduction in oil production

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On April 2, Saudi Arabia and a number of other OPEC+ countries announced a further reduction in oil production by approximately 1.16 million barrels per day.

Source: Reuters

Details: It is noted that the restrictions will come into effect from May and will last until the end of 2023.

The latest reduction in production may cause oil prices to rise by $10 per barrel, the newspaper writes.

Saudi Arabia said it had voluntarily cut production by 500,000 barrels per day to maintain the stability of the oil market.

“OPEC is taking precautionary steps in case of a possible reduction in oil demand,” Energy Aspects Director Amrita Sen said.

The administration of US President Joe Biden said that it considers the step announced by oil producers on April 2 to be inappropriate, the newspaper writes.

“We do not believe that cuts are appropriate at this time, given the uncertainty in the market, and we have made that clear,” said a representative of the US National Security Council.

It is reported that Iraq will reduce production by 211 thousand barrels per day, UAE – by 144 thousand, Kuwait – by 128 thousand, Oman – by 40 thousand, Algeria – by 48 thousand, Kazakhstan – by 78 thousand, Gabon – by 8 thousand, and the Russian Federation will continue its voluntary production reduction by 500 thousand barrels per day until the end of the year.

Some OPEC+ members have not joined the cuts because they have long produced oil well below agreed levels due to a lack of production capacity.

We will remind: In October, key OPEC+ ministers agreed to cut oil production by 2 million barrels per day.

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