On November 5, the world's two leading oil exporters, Russia and Saudi Arabia, announced that they would continue to voluntarily reduce production until the end of this year.
Reuters quoted a source from the Saudi Arabian Energy Ministry as saying that the country will still reduce production by another 1 million barrels a day, maintaining output around 9 million barrels a day in December. They are concerned that demand and economic growth will put pressure on the crude oil market.
"The voluntary production cut will reinforce the efforts of OPEC+ (Organization of the Petroleum Exporting Countries and allies) to support the stability and balance of the oil market," the source said.
On the same day, Russian Deputy Prime Minister Alexander Novak also announced a further reduction in exports of crude oil and oil products by 300,000 barrels per day. Russia has maintained this policy since August.
Over the past year, OPEC+ has maintained production cuts to support the market. In October 2022, OPEC+ announced a production cut of 2 million barrels a day - the largest since the pandemic appeared.
In May, Saudi Arabia led a small group that announced a voluntary cut of another 1 million barrels a day. In July, they cut another 1 million barrels. Russia also cut production by 500,000 barrels a day from April.
According to calculations by consultancy Energy Aspects, the policy of tightening supply has helped Russia and Saudi Arabia earn billions of dollars more from oil sales in the past few months, because the increase in oil prices is enough to compensate for the decrease in exports.
Brent crude oil prices hit a year-to-date high of $98 a barrel this year, but by November 3, they were hovering around $85, despite ongoing conflict in the Middle East.
Saudi Arabia and Russia’s decisions will be reviewed monthly. Yesterday’s announcement was also expected. OPEC+ will hold a policy meeting on November 26 in Vienna, Austria.
Ha Thu (according to Reuters)
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