Russia and Saudi Arabia, the world’s largest oil exporters, have announced that they will take measures to limit oil supplies in August. These announcements have led to an increase in oil prices in international markets.
Russia said it will cut crude oil exports by 500,000 barrels per day in August. The measure should help “keep the market in balance,” Russian Deputy Prime Minister Alexander Novak said, according to Russian news agencies.
Saudi Arabia, for its part, warned that it is extending the restriction on oil production by one million barrels per day. That restriction began in July and will remain in place at least through August. As a result, the kingdom’s production is currently around 9 million barrels per day, the lowest level in several years.
Price increases
Such measures are designed to reduce oil supply in the markets, which should lead to an increase in prices. The price of Brent oil from the North Sea rose after the announcements by 1.3 percent to 76.39 dollars (70.09 euros) per barrel in London.
Shortly after the Saudi announcement, Russian Deputy Prime Minister Alexander Novak said Moscow would cut its oil exports by 500,000 barrels per day in August.
Taken together, these reductions in oil production represent a 1.5 percent drop in global supply. This brings the total that OPEC+ has committed to 5.16 million barrels per day. OPEC+ has already achieved reductions of 3.66 million barrels per day, representing 3.6 percent of global demand. These reductions include 2 million barrels per day agreed last year, and voluntary reductions of 1.66 million barrels per day agreed in April and extended through December 2024.
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