The cut in OPEC oil production was adhered to by several countries including Russia, Saudi Arabia, United Arab Emirates and others
The organization of oil exporting countries, OPEC, made an announcement last Sunday about an exponential cut in world oil production. According to the announcement made by OPEC, starting in May, approximately 1 million barrels of oil per day will be withdrawn from the market, and this reduction could reach up to 1,6 million barrels per day in the month of July, with the extension of the cuts announced by Russia, considering that the country had already reduced oil production to 500 barrels per day, according to the Poder360 website.
The decrease in barrels of oil on the market is in line with the subject addressed at the OPEC meeting, which brings together the countries that are part of the cartel and Russia, in October 2022. During the meeting, the countries that are part of the OPEC announced a decrease of 2 million barrels of oil per day, the biggest reduction in oil production since 2020.
This reduction in OPEC's oil production was seen by the United States as an alignment with Russia, since the lower supply of oil in the oil and gas sector tends to make the price of a barrel of oil more expensive.
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Saudi Arabia leads the way in oil production cuts
In both years of OPEC oil production cuts, both in 2022 and 2023, Saudi Arabia Arabia led the reduction of barrels, and in a note issued last Sunday, the Saudi Arabian Ministry of Energy stated that it is “a precautionary measure aimed at supporting the stability of the oil market”.
OPEC cuts in production of barrels of oil per day, by country:
- Saudi Arabia: 500 thousand;
- Russia: 500 thousand;
- Iraq: 211 thousand;
- United Arab Emirates: 144 thousand;
- Kuwait: 128 thousand;
- Kazakhstan: 78.000;
- Algeria: 48.000;
- Oman: 40.000.
This new reduction in barrels of oil by OPEC should affect the prices of the commodity, since the barrel of the Brent type had its lowest value since the beginning of the war in Ukraine, in March 2022. Brent crude oil futures prices recomposed at the end of March 2023, but were still being quoted below US$ 80 last Friday, the 31st.