Global crude oil prices have risen after Saudi officials announced plans to cut production by an extra 1 million barrels per day (bpd), starting from July. The move is expected to take the country’s output to its lowest level in several years.
The main benchmarks jumped more than 2% on Monday following the news. Brent crude futures were trading at $77.89 a barrel at 9:50am London time, up 2.3%. US West Texas Intermediate futures stood at $73.50, over 2.4% higher.
On Sunday, the OPEC+ group of leading oil-producing countries opted not to make changes to previously planned production curbs for the rest of the year.
Saudi Arabia’s output will decline to 9 million bpd from around 10 million bpd in May, the kingdom’s energy minister, Prince Abdulaziz bin Salman, said in a statement. He added that his country “will do whatever is necessary to bring stability to this market.”
The OPEC+ group has agreed to cut overall crude oil production to 40.46 million bpd in 2024. Russia’s quota for next year, according to the agreement, will be reduced to 9.828 million bpd, from 10.478 million bpd this year.
OPEC+ collectively accounts for nearly 40% of global crude output, meaning that the alliance’s policy decisions can have a major impact on prices.
Global crude prices have fallen more than 20% since OPEC+ countries took their first steps toward output cuts in October 2022. The measure, which came into force in November, was expected to take some 2 million bpd off the market.
In April, the group agreed further curbs, which took effect in May and are set to last until the end of 2023. The total volume of oil leaving global markets was expected to be 1.66 million bpd.
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