Saudi Arabia says it will reduce how much oil it sends to the global economy
Saudi Arabia said Sunday that it will reduce how much oil it sends to the global economy, taking a unilateral step to support the sagging cost of crude after two previous cuts to supply by major oil-producing countries in the OPEC+ alliance failed to push prices higher.
The announcement of Saudi’s cuts of 1 million barrels per day, which will start in July, followed a meeting of the alliance at OPEC headquarters in Vienna. The rest of the OPEC+ producers agreed to extend earlier production cuts through the end of 2024.
“This is a grand day for us, because the quality of the agreement is unprecedented,” Saudi Energy Minister Abdulaziz bin Salman said at a news conference, adding that the new production targets are “much more transparent and much more fair.”
Calling the Saudi reduction a “lollipop,” bin Salman said, “We wanted to ice the cake.” He said the cut could be extended and that the group “will do whatever is necessary to bring stability to this market.”
The slump in oil prices has helped U.S. drivers fill their tanks more cheaply and given consumers worldwide some relief from inflation. It’s possible the latest production cut could send oil prices up and with them, gasoline costs.
That the Saudis felt another cut was necessary underlines the uncertain outlook for demand for fuel in the months ahead.
