The steps taken by Saudi Arabia and Russia to reduce crude oil production earlier this year will continue in the coming days to keep the market balanced after the oil market slump due to the war in Ukraine.
This information was confirmed by the world’s top two oil producing and selling countries in separate statements on Monday. The two countries also lead the OPEC Plus group of oil producing and selling countries.
On February 24, 2022, the United States and Europe imposed an embargo on Russian oil as a punitive measure against Russia after Russian forces began military operations in Ukraine. As a result, in the first few months after the end of the war, crude oil or petroleum prices were increasing.
But at the same time, most of the countries of the world reduce the purchase of fuel oil as the price of the dollar increases. As a result, the oil market began to slump and oil producing and selling countries began to suffer losses.
In this situation, Russia decided to reduce oil production for the first time in February this year. In a statement at that time, Russia said that from now on, the country will extract 300,000 barrels of oil less per day.
About a month and a half after Russia made this announcement, Saudi Arabia’s Ministry of Energy and Oil Affairs announced that it would reduce its daily oil production from 1 million barrels to 90 million.
The Saudi ministry said in a statement on Monday that the country has no plans to increase oil production until December this year.
Russia also announced not to increase oil production until the end of this year in a notification issued some time after Saudi made this statement.
OPEC Plus is meeting in Vienna on May 26. It is assumed that the meeting will decide whether oil extraction will be increased in 2024.
Source: Reuters
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