Saudi Arabia Pledges Big Oil Cuts In July As OPEC+ Extends Deal Into 2024
Saudi Arabia Plans Voluntary Oil Production Cuts In July, With OPEC+ Extending The Deal Into 2024
Crude oil prices followed a bullish trend after the leading OPEC oil exporter, Saudi Arabia, pledged to cut production to approximately 9 million barrels a day from 10 million in May 2023. The production cut is expected to be in effect from July 2023. OPEC+ contributes to circa 40% of global crude oil production, and the organisation's decisions have a significant influence on oil prices.
Request Access For the Latest Price Trends of Crude Oil
Meanwhile, the remaining OPEC+ producers reached an agreement to continue earlier supply cuts till the conclusion of 2024. The crude oil market was bearish despite the two previous crude oil production cuts by OPEC+. Therefore, The Kingdom of Saudi Arabia pledged production cuts in July.
Furthermore, Saudi believes the cut is necessary, taking into account the sluggish demand for fuel as a result of the economic downturn in Europe and North America, as well as the slower-than-expected Chinese rebound from its COVID-19 restrictions. There are concerns about economic weakness in the US and Europe, while China's rebound from COVID-19 restrictions has been less robust than many had hoped.
Western Europe and North America have accused OPEC nations of manipulating crude oil prices and sabotaging the Western economy with high energy costs. The West also criticises OPEC nations for siding with the Russian Federation over Moscow's Ukraine invasion.
Read More About Crude Oil Production Cost Reports - Get Free Sample Copy in PDF
Meanwhile, OPEC believes the West's over-printing of currency over the last few years has led to inflation, subsequently compelling the oil-exporting countries to retain the oil export value.
As per the article by Procurement Resource, Saudi Arabia's pledge to cut crude oil production and the OPEC+ group's extension of supply cuts until the end of 2024 provided upward pressure on crude oil prices. As per Saudi Arabia, the economic downturn in the West, coupled with the slower-than-anticipated Chinese rebound, led to the requirement for production cuts.
