Categories: International

OPEC members announce cut in oil production exceeding one million barrels per day from next month

In a sudden announcement, OPEC members, such as Saudi Arabia, the UAE, Iraq, Kuwait, and Algeria, have declared voluntary oil production cuts of more than one million barrels per day from May to December. They have stated that this is a preventive action to support the stability of the oil market.

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OPEC members Announced cut in oil production:

The group, which consists of 23 oil-producing countries, had reduced its collective output by two million barrels per day in the previous year and is expected to maintain the agreed-upon production levels at their upcoming virtual meeting.

Why OPEC wants to Cut the Oil Production:

To bring stability to the market, OPEC members, including Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, Algeria, and Oman, made an unexpected announcement of oil production cuts during a virtual meeting of the OPEC Plus ministerial panel.

The cuts, which are set to begin in May and last until the end of the year, are the most significant reduction since oil producers cut two million barrels per day in October 2022. The decision was made after a drop in oil prices last month, with prices falling to $70 a barrel, and concerns that the global banking crisis could impact demand.

According to official statements made by OPEC Plus members, the following production cuts have been announced:

  • Russia: 500,000 barrels per day (bpd)
  • Saudi Arabia: 500,000 bpd
  • United Arab Emirates (UAE): 144,000 bpd
  • Kuwait: 128,000 bpd
  • Kazakhstan: 78,000 bpd
  • Algeria: 48,000 bpd
  • Oman: 40,000 bpd

These cuts, which were announced during a virtual meeting of the OPEC Plus ministerial panel, are aimed at bringing stability to the oil market and will be implemented from May until the end of the year. It is worth noting that the success of the production cuts will depend on the adherence of all members to their agreed-upon quotas.

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Piyush Shukla

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