OPEC Plus Announces Cut In Oil Production

Saudi Arabia and other other Organisation of the Petroleum Exporting Countries (OPEC) Plus oil producers reportedly announced voluntary cuts to their production.

opec, opec plus, saudi arabia, oil production cut — Riyadh, Saudi Arabia's capital and main financial hub, said it would cut output by 500,000 barrels per day. (Photo: Pixabay)

New Delhi: Saudi Arabia and other Organization of the Petroleum Exporting Countries (OPEC) Plus oil producers reportedly announced voluntary cuts to their production by more than 1.2 million barrels of crude in per day. Riyadh, Saudi Arabia’s capital and main financial hub, said it would cut output by 500,000 barrels in a day, or BDP, from May.

In a statement carried out by the Saudi Press Agency (SPA), the Saudi official emphasised that this is a precautionary measure aimed at supporting the stability of the oil market, according to Emirates News Agency as per a report by ANI.

The latest voluntary cut is in addition to the reduction in production agreed upon during the 33rd OPEC and non-OPEC Ministerial Meeting, held on October 5 last year. The move came as a surprise as OPEC Plus said that they did not intend to make any changes in their policies but this announcement blew everyone, The Washington Post reported.

There have been persistent reports that Russia is struggling to keep up production without the benefit of Western service companies that have wound down their operations since the Russian invasion of Ukraine more than a year ago. Saudi production has also been below its production quota set by the Organization of the Petroleum Exporting Countries in recent months.

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According to The Washington Post, taking up the slack in supplying the 100-million-barrel-a-day global market are Brazil, Canada, Guyana, Norway and the United States. All are increasing their oil production.

What is OPEC Plus

OPEC currently has 13 members, with the five founders having since been joined by Algeria, Angola, Congo, Equatorial Guinea, Gabon, Libya, Nigeria and the United Arab Emirates. Its headquarters is in the Austrian capital Vienna. In 2016, OPEC formed an alliance with other oil-producing nations to create OPEC Plus. The 10 countries now in OPEC+ include Russia, Kazakhstan, Azerbaijan, Mexico, and Oman.