CESCE, Country Risk
Saudi Arabia has communicated its intention to cut its daily production by one million barrels from July 1, as part of an agreement with the entire OPEC+, in order to limit oil supply and increase prices.
![[Img # 52907]](https://empresaexterior.com/upload/images/06_2023/7286_logo-fachada-cesce.jpg){kind=logo}
The decision accompanies the reduction made last April, when the OPEC+ countries announced that they would carry out voluntary cuts for a joint value of 1,66 million. b/d throughout 2023 (now extended through 2024).
Of this amount, 500.000 b/d correspond to Saudi Arabia, which now hassurprised by announcing a new cut (unilateral and voluntary), to prevent other members from having to do it, which the Saudi Energy Minister has called “a candy” for his colleagues. Thus, in July the Kingdom will produce only 9 million. b/d, the largest reduction in years, a level that could be maintained until the end of the year and that is very far from the country's total capacity (around 12 million b/d).
The decision is part of Saudi efforts to stabilize the oil market at a higher price level than the current one; according to him IMF, Riyadh It needs a barrel price above $80 to balance its budget. In April, international prices were briefly raised, but doubts about the weakness of the world economy caused them to fall again. Following the announcement made on Monday, the prices of a barrel of Brent and WTI increased almost 5%.
Source: CESCE
Any questions about this news?
Talk to Coexia, the AI of the foreign trade
International business service providers
Credit and caution
Leading operator of domestic and export credit insurance in Spain, with a market share of 46%.read more...
Cesce
Cesce, the Spanish Export Credit Insurance Company, is the head of a group.read more...
