Saudi Arabia and Russia to continue voluntary cuts until year end

OPEC+ top oil producers Saudi Arabia and Russia have announced to extend voluntary production and export cuts until year-end.

PHOTO: Flags of Russia and Saudi Arabia behind a barrel of oil. Getty Images

OPEC's de facto leader Saudi Arabia announced that it will continue the voluntary crude oil reduction of 1 million b/d for December as well, an official source from Saudi Arabia's Ministry of Energy said in a statement to Saudi Press Agency on Sunday. This means that Saudi Arabia will produce 9 million b/d for December.

The official source also indicated that the decision to maintain, deepen or roll back these voluntary cuts for January will be announced next month. The decision regarding voluntary cuts for January is likely to be made by the first week of December, Energy Intelligence's chief OPEC correspondent & deputy bureau chief Amena Bakr said on social media platform X (formerly Twitter).

Alongside Saudi Arabia's commitment to continue the voluntary crude oil reduction of 1 million b/d for December, Russia also announced that they will extend their additional voluntary oil export cuts by 300,000 b/d until December 2023.

Russia’s Deputy Prime Minister Alexander Novak said on Sunday that the country will continue additional voluntary oil export cuts by 300,000 b/d until December 2023, their state-owned media agency TASS reported.

According to Novak, the country will analyse the global oil market in December to “make a decision on deepening the reduction or increasing the production of petroleum products,” TASS added.

Additionally, the minister confirmed that this additional measure “supplements the voluntary oil production cuts by 500,000 barrels a day [500,000 b/d] that was announced by Russia in April 2023 and will stay in place until late December 2024,” and will continue to support the oil-producers group’s measures to bring a balance in the global oil market, TASS added.   

“The confirmation from these producers that they would continue with cuts shouldn’t come as too much of a surprise,” said two analysts from ING Bank. “However, what the market will be more interested in is if they extend these cuts into early 2024,” they further added.

By Aparupa Mazumder 

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