Saudi Arabia, Russia to continue voluntary oil cuts citing demand concerns
OPEC has been implementing production cuts since last year to actively maintain market stability.
The two leading oil exporters, Saudi Arabia and Russia, have announced their intentions to continue their excess voluntary oil production cuts until the end of the year.
These cuts are being exacerbated by concerns about demand and economic growth, which continue to weigh on crude oil markets.
Saudi Arabia will maintain an additional voluntary cut of 1 million barrels per day (bpd), which translates to a production level of about 9 million barrels for December. The decision to continue the cuts is part of ongoing efforts by OPEC+ countries to help stabilize and balance oil markets.
In response to Saudi Arabia's announcement, Russia has also confirmed that it will continue to cut additional voluntary supply of 300,000 bpd from its crude oil and petroleum product exports until the end of December.
OPEC+ has been implementing production cuts since last year to actively maintain market stability. While oil prices peaked in 2023, trading near $98 a barrel for Brent crude in September, they have since softened and in recent days despite geopolitical tensions in the Middle East. They were trading at around $85 per barrel.
Saudi Arabia, OPEC's de facto leader, began voluntary cuts in July as an extension of a broader supply-limiting deal that some OPEC+ members struck in April.
In September, the kingdom extended its voluntary cut until the end of the year and pledged to review the decision every month.
The market had widely expected Saudi Arabia to confirm its cut extension by December. OPEC+ had earlier decided in June to limit oil supply until 2024.
The alliance is scheduled to convene its next meeting in Vienna on November 26, where it will further assess the situation and decide on any necessary adjustments to its oil production policy.
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