From Saudi Arabia to Iran – Nearly a dozen countries announce oil output cuts from May

United Arab Emirates (AP) — Saudi Arabia said Sunday that it will reduce oil output by 500,000 barrels per day between May and the end of 2023. This decision may result in higher oil prices throughout the world. The Saudi Energy Ministry said the cuts would be made in coordination with some OPEC and non-OPEC members, without naming them. The reductions are in addition to one made public in October of last year that enraged the Biden administration. The ministry referred to the action as a “precautionary measure” aimed at keeping the oil market stable. The reductions amount to less than 5% of Saudi Arabia’s projected 11.5 million barrel daily average output in 2022.

In reaction to Western sanctions that were set to run out at the end of June, Russia said on Sunday that it was extending the 500,000 barrel daily oil output restrictions until the end of the year. “As a responsible and preventive action, Russia is implementing a voluntary reduction of 500,000 barrels per day until the end of 2023,” Alexander Novak, a deputy prime minister in charge of energy issues, said in a statement. In light of the intense market volatility, Russia has chosen to maintain its oil output at a lower level through 2023, according to Deputy Prime Minister Alexander Novak. “Today the global oil market is going through a period of high volatility and unpredictability due to the ongoing banking crisis in the US and Europe, global economic uncertainty, and unpredictable and short-sighted energy policy decisions,” Novak said in a statement released on Sunday. “At the same time, stability and transparency in global oil market are key in ensuring energy security in the long run.”

In conjunction with other OPEC members, Kazakhstan will voluntarily reduce its oil production by 78,000 barrels per day from May until the end of 2023, the nation’s energy minister announced on Sunday. “This voluntary cut is a precautionary measure in addition to the reduction in production agreed at the 33rd OPEC and non-OPEC Ministerial Meeting on October 5, 2022,” it said. 

According to state media, Algeria’s energy ministry said on Sunday that it will voluntarily reduce its oil output by 48,000 barrels per day from May until the end of 2023. On the other hand, Oman will voluntarily cut its oil production by 40,000 barrels per day beginning in May and continuing through the end of 2023, the energy ministry tweeted on Sunday. The energy minister said on Sunday that the UAE will voluntarily reduce its oil output by 144,000 barrels per day from May through the end of 2023.

Unexpected production cuts by OPEC members of 1.15 million barrels per day might increase oil prices globally by $10 per barrel, the head of investment firm Pickering Energy Partners said on Sunday.

(With inputs from agencies)