Members of the OPEC+ organization disclosed a coordinated decrease in crude oil production until the end of 2023, which will reach one million barrels per day.
The Vice President of the Russian Government, Alexander Novak, said Russia would diminish oil production by 500,000 barrels per day by the end of the year. Moscow told this at the identical time Saudi Arabia, Kuwait, Oman, Iraq, and the United Arab Emirates announced production restrictions, all until the end of this year.
Novak announced that it acts as a reliable market member and safeguards against further market volatility. The Russian Federation will execute an uncoerced production cut of 500,000 barrels per day by the end of 2023.
This is not the first time Russia has expanded the limitation announced by the Russian Deputy Prime Minister in February.
A surprising decision
In the analysis, Bloomberg points out that lowering oil production by one million barrels per day is unexpected and estimates that OPEC+ is ditching previous assurances to keep the supply stable so that the market remains steady.
Bloomberg analysts voiced a significant cut in crude oil production would raise inflationary pressures worldwide, compelling central banks to keep interest rates higher for longer, increasing the chance of a recession.
Saudi Arabia reported on Sunday that it is modifying its production by 500,000 barrels per day from May until the end of the year, stating it is a precautionary measure to stabilize the oil market.
The United Arab Emirates announced a decline of 144,000, Algeria by 48,000, Iraq by 211,000, Kuwait by 128,000, and Oman by 40,000 barrels per day, as stated by their agencies.
Kazakhstan’s energy ministry declared on Sunday that it will cut production by 78,000 barrels per day from May until the end of the year in coordination with other OPEC+ partners.