Saudi Arabia Announces 1 Million Barrels Per Day Cut in Oil Production to Prop Up Prices

At a news conference in Vienna, Saudi Energy Minister Abdulaziz bin Salman announced that Saudi Arabia will reduce its oil production by 1 million barrels per day, starting in July. This move is intended to prop up the sagging price of crude, after two previous cuts to supply by major producing countries in the OPEC+ alliance failed to push oil higher.

The Saudi cut comes as the other OPEC+ producers agreed to extend earlier production cuts through next year. Minister Salman referred to the reduction as a “lollipop” and said that “we wanted to ice the cake.” He also noted that the cut could be extended and that the group “will do whatever is necessary” to ensure market stability.

The announcement comes as the global economy continues to struggle with the effects of the COVID-19 pandemic. Oil prices have been volatile in recent months, with prices dropping to their lowest levels in decades. The OPEC+ cuts are intended to help stabilize the market and ensure that prices remain at a reasonable level.

The Saudi cut is a unilateral move, and it remains to be seen how it will affect the global oil market. However, it is clear that the OPEC+ alliance is committed to doing whatever is necessary to ensure market stability and prevent further price drops.