DUBAI, April 2 (Reuters) – Saudi Arabia and other OPEC+ oil producers announced voluntary production cuts of around 1.15 million barrels per day on Sunday in a surprise move they said was aimed at supporting the stability of the market.
The group was largely expected to stick with 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 Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, agreed to production cuts of 2 million bpd from November through the end of the year, angering Washington as shortages supply drives oil prices.
The United States has argued that the world needs lower prices to support economic growth and prevent Russian President Vladimir Putin from raising more revenue to finance the Ukraine war.
The unexpected voluntary cuts on Sunday, which start from May, are added to those already agreed in October.
Riyadh said it would cut output by 500,000 bpd, while Iraq will cut output by 211,000 bpd, according to official statements.
The United Arab Emirates said it would cut output by 144,000 bpd, Kuwait announced a 128,000 bpd cut, while Oman announced a 40,000 bpd cut and Algeria said it would cut output by 48,000 bpd. Kazakhstan will also cut production by 78,000 bpd.
Russia’s 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 announced those cuts unilaterally in February after the introduction of Western price caps.
After Russia’s unilateral cuts, US officials said their alliance with other OPEC members was weakening, but Sunday’s move shows cooperation remains strong.
Saudi Arabia’s 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.
Oil prices fell to 15-month lows earlier this month in response to the banking crisis that followed the collapse of two US lenders and resulted in the bailout of Credit Suisse by Switzerland’s biggest bank, UBS.
“OPEC is taking preemptive measures in the event of a possible reduction in demand,” Amrita Sen, founder and director of Energy Aspects, said on Sunday.
Reporting by Maha El Dahan, Ahmed Rasheed, Dmitry Zhdannikov, and Adam Makary; Edited by Hugh Lawson and Sharon Singleton
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