[Asia Economy Reporter Jeong Hyunjin] Saudi Arabia announced on the 8th (local time) that it will stop the voluntary production cuts it had been implementing in addition to the OPEC+ (Organization of the Petroleum Exporting Countries (OPEC) member countries and non-OPEC coalition) agreement by the end of this month.
According to Bloomberg News and others, Abdulaziz bin Salman, Saudi Minister of Energy, stated that this decision was made considering the significant rise in international oil prices. Last month on the 11th, Saudi Arabia, along with Kuwait and the United Arab Emirates (UAE), decided to voluntarily reduce oil production in addition to the OPEC+ cuts. At that time, Saudi Arabia's voluntary reduction amounted to 1 million barrels per day, and including all allied countries, it reached about 1.2 million barrels per day.
Minister Abdulaziz said, "The voluntary production cuts have met their objectives and are moving accordingly," adding that they will not be complacent and will hold monthly meetings to discuss the oil market and respond proactively.
This announcement came after OPEC+ agreed on the 6th to extend the largest-ever production cuts. Through a virtual meeting, OPEC+ agreed to reduce oil production by 9.6 million barrels per day next month as well. Initially, at the April OPEC+ meeting, it was decided to cut production by 9.7 million barrels per day in May and June, then reduce the cut to 7.7 million barrels per day starting in July.
This OPEC+ agreement includes provisions to enforce member countries to comply with the production cut agreement. Saudi Arabia and Russia, who led the OPEC+ meetings, have instructed Iraq, Nigeria, Angola, and Kazakhstan?who agreed to cuts but did not properly implement them?to reduce additional oil production by the amount of their non-compliance by September.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
