In a surprised move, the UAE, Saudi Arabia and other Opec+ members on Sunday announced plan to voluntary cuts their oil production of about 1.15 million barrels in order to bring price stability in the energy market.
The group of oil-producing nations had been largely expected to stick to its already agreed 2 million bpd cuts when its ministerial panel, which includes Saudi Arabia and Russia, meets virtually on Monday.
Last October, Opec+, which comprises the Organisation of Petroleum Exporting Countries (Opec) and allied producers led by Russia, agreed output cuts of 2 million bpd from November until the end of the year, angering Washington as tighter supply boosts oil prices.
The US has argued that the world needs lower prices to support economic growth and prevent Vladimir Putin from earning more revenue to fund Russia’s invasion of Ukraine.
Sunday’s unexpected voluntary cuts, which start from May, come on top of those already agreed in October.
Saudi Arabia said it would cut output by 500,000 bpd while Iraq will reduce its production by 211,000 bpd, according to official statements.
The UAE said it would cut production by 144,000 bpd, Kuwait announced a cut of 128,000 bpd while Oman announced a cut of 40,000 bpd and Algeria said it would cut its output by 48,000 bpd. Kazakhstan will also cut output by 78,000 bpd.
Russian deputy prime minister Alexander Novak also said on Sunday that Moscow would extend a voluntary cut of 500,000 bpd until the end of 2023. Moscow had announced those cuts unilaterally in February after the introduction of western price caps.
After those unilateral reductions, US officials had said the Kremlin’s alliance with other Opec members was weakening, but Sunday’s move suggests cooperation is still strong.
— With inputs from Reuters