Oil prices worldwide soared after Saudi Arabia and other OPEC+ nations surprised markets by announcing they would voluntarily cut production even further in 2023.
OPEC+ had slashed production by 2mn barrels throughout the year, but they weren’t expected to take it further.
Over the weekend, top OPEC producer Saudi Arabia said it would cut output by half a million barrels per day from May by late-2023. The energy ministry announced it was a bid to support the stability of the oil market.
OPEC ally Russia said it would extend a voluntary cut of half a million barrels per day until the end of 2023.
The United Arab Emirates, Kuwait, Iraq, Oman, and Algeria said they would voluntarily cut output simultaneously.
Following Reuters calculations, the latest pledges bring the total volume of cuts by OPEC+ to 3.7mn barrels per day. That’s about 4% of the world’s oil demand.
As a result of Sunday’s news, Goldman Sachs forecasted a 7% jump in oil prices, contributing to higher Saudi and OPEC+ oil revenues.
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