https://arab.news/53ay6
DUBAI: Saudi Arabia will make major cuts in oil output over the next two months as a “gesture of goodwill” to global crude markets, Energy Minister Prince Abdul Aziz bin Salman said on Tuesday.
The minister told a meeting of the OPEC+ alliance that the Kingdom would voluntarily cut an extra one million barrels per day in February and March in addition to its agreed supply reductions.
“We will support the market and we will support the industry,” he said. “We are the guardians of the industry. What we are doing today is not a compromise, it is not a little thing, it is not a tweak. It is a continuity of the trust we are getting from the G20 and other forums.”
The cuts were a “pre-emptive measure to mitigate the situation” in the face of fragile markets, the minister said.
The extra Saudi cuts, which surprised analysts watching the OPEC+ proceedings, enabled the producers to reach an agreement on oil supply after two days of intense negotiations between one camp led by Russia and Kazakhstan, who wanted to increase production by 500,000 barrels next month, and the rest of the 23-strong membership who wanted to continue January output levels.
Alexander Novak, the Russian deputy prime minister responsible for OPEC+ matters, said the unexpected Saudi cuts were “a great new year present to the oil industry from Saudi Arabia.”
Russia and Kazakhstan will be allowed to increase output next month by a total 75,000 barrels because of seasonal demand in their countries.
Prince Abdul Aziz said the decision to cut extra barrels was “a unilateral decision and a home grown idea. It was a leadership idea we are executing.”
Brent crude, the global benchmark, leapt on the unexpected Saudi cuts, ending nearly 6 per cent ahead at $53.63, its highest level since February.