(Tiper Stock Exchange) – Saudi Arabia and Russia they have extended unilateral oil supply cuts for another three months. The move, which was more aggressive than traders had expected, immediately triggered a rise in crude oil prices on international markets.
Saudi Arabia, leader of the Organization of the Petroleum Exporting Countries (OPEC) will continue to cut production of 1 million barrels per day through December, according to a statement released by the state news agency. The initiative will keep production at about 9 million barrels per day, the lowest level in several years, for six months in total.
“This voluntary cut decision will be reviewed monthly to evaluate whether to deepen the cut or increase production”, the statement reads, underlining that the move aims at the “stability and equilibrium of the oil markets”.
Russia will instead extend the voluntary cut of oil shipments to world markets 300,000 barrels per day until the end of this year, Russian Deputy Prime Minister Alexander Novak said. “Now the voluntary decision to reduce oil production will be reviewed monthly to consider the possibility of deepening the reduction or increasing production, depending on the situation on the world market” Novak said, according to the Interfax news agency.
The voluntary export reduction measure comes on top of the voluntary reduction in oil production of 500,000 barrels per day announced in April, which will last until the end of 2024, he said. According to Novak, the reduction of shipments of Russian oil to world markets aims “to strengthen the precautionary measures taken by OPEC+ countries to maintain stability and balance on the oil markets”.
The price of futures on WTI extension show an increase of 2.08% to 87.3 dollars a barrel, while those on the Brent show an increase of 1.51% to 90.3 dollars a barrel, at 15:45 Italian time.