Saudi Arabia Could Deepen Oil Production Cuts Amid Supply Curb Extension With Russia

Saudi Arabia has indicated that it might further reduce its oil production. This comes as the country continues its voluntary agreement with Russia to limit oil supply for another month.

This decision is made despite the recent increase in crude oil prices, which could potentially reignite conflicts between Saudi Arabia and the U.S., Financial Times reports.

The Opec+ leaders have been implementing production cuts over the past year to support oil prices. This has often caused friction with the White House, which prefers lower prices to bolster the economy.

Saudi Arabia will continue its one million barrels a day (b/d) production cut, known as the “Saudi lollipop,” until the end of September. Russia will reduce oil exports next month by 300,000 b/d.

The Saudi cut could be extended or “deepened,” according to the country’s Ministry of Energy.

“The market thinks that current Saudi production levels were a hard floor, but they’re indicating output could go lower at least until inventories come down and the market stabilizes,” said Christyan Malek, global head of energy strategy at JP Morgan.

After the announcements, Brent crude, the global benchmark, rose almost 2% to $84.75 per barrel.

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