OPEC+ Announces Surprise 1,000,000bpd Production Cut

By Adedapo Adesanya

The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) announced a surprise oil production cut that will exceed 1 million barrels a day.

This surprise move abandons previous assurances that it would hold supply steady to maintain a stable market.

Business Post had reported on Friday that the 23-man alliance was likely to retain its output cut level, but this appears not to be the case.

OPEC+ leader Saudi Arabia also led the cartel by pledging its own 500,000 barrel-a-day supply reduction.

Fellow members, including Kuwait, the United Arabia Emirates (UAE) and Algeria, followed suit, while Russia said the production cut it was implemented from March to June would continue until the end of 2023.

The UAE said it would cut production by 144,000 barrels per day, Kuwait announced a cut of 128,000 barrels per day while Iraq said it would cut output by 211,000 barrels per day and Oman announced a cut of 40,000 barrels per day. Algeria said it would cut its output by 48,000 barrels per day.

The Saudi energy ministry said in a statement that the kingdom’s voluntary cut was a precautionary measure aimed at supporting the stability of the oil market.

Russia’s deputy prime minister, Mr Alexander Novak, also said the cartel’s ally would extend a voluntary cut of 500,000 barrels per day until the end of 2023.