By Staff writer
Voluntary move, on top of OPEC+ cuts agreed in April, will see production drop to 7.492m barrels per day
Saudi Arabia is to voluntarily cut its oil production in June by an extra one million barrels per day – on top of the reduction already committed to as part of the OPEC+ agreement signed last month.
A Saudi Ministry of Energy official said national oil giant Saudi Aramco has been directed to make the cuts, which will slash total production by around 4.8 million barrels per day, from April production levels.
According to the Saudi Press Agency, the kingdom’s production for June, after both targeted and voluntary cuts, will be 7.492m barrels per day – its lowest in 18 years.
The Ministry also directed Aramco to look at reducing its production for May, from the target level of 8.492m barrels per day, “in consent with its customers”.
The report says the additional cuts are designed to “encourage OPEC+ participants, as well as other producing countries, to comply with the production cuts they have committed to, and to provide additional voluntary cuts, in an effort to support the stability of global oil markets”.
Oil futures rose on the news.
On Monday, Saudi announced a range of austerity measures including trebling the current rate of VAT from five percent to 15 percent, as well as ending monthly cost-of-living allowances paid to government workers and a reduction in spending on some programmes under Crown Prince Mohammed bin Salman’s ‘Vision 2030’ economic transformation plan.