Emmanuel OchayiIn a joint effort to maintain global oil market stability, Saudi Arabia and Russia have announced their commitment to continue voluntary production cuts through December 2023.
Saudi Arabia will reduce its output by 1 million barrels per day (b/d), maintaining a production level of around 9 million b/d, while Russia will sustain a 300,000 b/d cut in crude oil and oil product exports.
Deputy Prime Minister Alexander Novak of Russia, addressing the matter, stated, “Russia remains committed to supporting market stability by extending production cuts through 2023. We understand the importance of this collective effort.”
Both nations emphasized that this decision will undergo a review in December 2023 to consider the possibility of deepening the cuts or increasing production in light of market conditions.
These efforts align with the broader objectives of OPEC countries to ensure the stability and balance of global oil markets. Industry experts predict that these measures will help maintain oil prices and market equilibrium.
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However, concerns are growing due to developments, such as the Middle East conflict, which has led to calls for an oil export embargo by some producers in the region. The ongoing conflict poses a threat to oil production and supply infrastructure.
The next OPEC+ ministerial meeting on November 26 will play a role in addressing these issues and discussing production quotas. The World Bank’s October 2023 Commodity Outlook report suggests that geopolitical risks, coupled with the OPEC+ supply contraction and rising demand, are expected to bolster oil prices in the final quarter of 2023. The forecast remains cautiously optimistic, with the assumption that global oil production will rise in early 2024.
As of Monday, 7:22 AM GMT+1, Brent crude was priced at $85.27 per barrel. The global oil market will be closely monitored as these nations continue their efforts to ensure stability and balance in oil supply and demand dynamics.
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