The decision by oil exporters to cut production was unexpected and will certainly lead to higher prices, writes Reuters.
Several OPEC+ countries announced on Sunday, April 2, a reduction in oil production of approximately 1.16 million barrels per day. This was reported by Reuters.
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It is known that the decision of the oil exporting countries included in the group is an unexpected step, which, according to analysts, will cause an immediate price increase.
The production cut will begin in May and last until the end of the year. According to forecasts, this could lead to an increase in oil prices by $10 per barrel.
OPEC’s biggest producer Saudi Arabia said it would voluntarily cut production by 500,000 bpd. The country’s Ministry of Energy emphasized that this is a precaution aimed at maintaining the stability of the oil market.
In addition, according to the agency, the UAE will reduce production by 144,000 bpd, Iraq by 211,000, Kuwait by 128,000, Kazakhstan by 78,000, Oman by 40,000 and Algeria by 48,000.
Russia also aims to cut production by 500,000 barrels per day by the end of 2023.
The US has stressed that the world needs lower oil prices to support economic growth and prevent Russian President Vladimir Putin from getting more revenue to finance the war in Ukraine.
The White House called the decision of OPEC + countries “irrational”, given the uncertainty in the market.
It can be recalled that last month the price of oil dropped to $70 per barrel, which is the lowest level in the past 15 months.
The current cut will be in addition to the 2,000,000 bpd cut announced last October.
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Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.