RIYADH: Saudi Arabia will continue the voluntary cut of 1 million barrels of oil per day in November and December, a Ministry of Energy source has told the Kingdom’s official news agency.
The move means Saudi Arabia’s production for the final two months of the year will be approximately 9 million bpd.
Brent crude oil futures were down 58 cents, or 0.64 percent, on the day at $90.34 a barrel before the announcement, but after the cuts were confirmed they were instead trading at 0.46 percent lower at 12:21 p.m. Saudi time.
This reduction is in addition to the voluntary cuts the Kingdom had previously announced in April, when Riyadh agreed to reduce output by 500,000 bpd until the end of December 2024.
“The source indicated that the decision on this reduction will be reviewed next month, to consider increasing the reduction, or increasing production,” said the Saudi Press Agency reported
The source confirmed that this additional voluntary reduction comes to strengthen the precautionary efforts made by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, with the aim of supporting the stability and balance of the market.
In June, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman urged everyone to trust OPEC+ and called it the most effective international organization working hard to maintain market stability.
“Taking a precautionary measure tends to put you on the safe side. And it is part of the typical rhythm that we have installed in OPEC, which is being proactive, being preemptive,” Prince Abdulaziz told CNBC.
Meanwhile, Russia said that it will continue its current 300,000 bpd crude export cuts until the end of 2023, and will review its voluntary 500,000 bpd output cut, set back in April, in November, Reuters reported.
Speaking at the World Petroleum Congress in Calgary in September, the Saudi energy minister said international energy markets need light-handed regulation to limit volatility.
Prince Abdulaziz added that supply and demand forecasts regarding oil are not always reliable.
“It’s always better to go by my motto, which is, ‘I believe it when I see it.’ When reality comes around as it’s been forecast, Hallelujah, we can produce more,” he said.
The energy minister added that Saudi Arabia wants to develop and trade clean hydrogen and electricity, but the Kingdom requires partnerships with other countries, offtake buyers, and investors.