Saudi Arabia and Russia agree to prolong oil supply cuts, boosting prices.
Saudi Arabia and Russia Extend Voluntary Supply Cuts
Saudi Arabia and Russia have announced that they will extend voluntary supply cuts through September, marking the third consecutive month of declines. Despite lower supplies and increasing demand, oil prices continue to rise sharply.
Saudi Arabia’s Voluntary Oil Cuts
Citing an official from the Saudi Ministry of Energy, state-run news outlet SPA reported that the kingdom’s voluntary oil cuts of 1 million barrels per day would be extended for another month. The official stated that the cuts could be extended or deepened.
In September, Saudi Arabia’s production will be approximately 9 million barrels per day.
“This additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets,” the ministry official said.
Russia’s Oil Export Cuts
Russia also announced that it would cut its oil exports by 300,000 barrels per day in September, according to Russian Deputy Prime Minister Alexander Novak.
The news of these cuts immediately led to a surge in oil prices. International benchmark Brent crude futures rose to $83.96 per barrel, while U.S.-based West Texas Intermediate reached $80.32.
Analysts expect oil prices to continue rising due to tightening supplies and increasing demand. Goldman Sachs upgraded its oil demand forecast, projecting a supply deficit of 1.8 million barrels per day in the second half of 2023. Exxon Mobil CEO Darren Woods also anticipates record-high demand in the third quarter of 2023, with deficits of almost 2 million barrels per day.
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