Saudi Arabia, Russia to Continue Voluntary Oil Cuts Citing Demand Concerns

Saudi Arabia and Russia, two top oil exporters, announced their intentions to continue additional voluntary cuts in oil production until the end of the year.

Those cuts are being extended by concerns about demand and economic growth, which continue to weigh on crude oil markets.

Saudi Arabia will maintain its additional voluntary cut of 1 million barrels per day (bpd), which translates to an output level of around 9 million bpd for December. The decision to continue this cut is part of the ongoing efforts of OPEC+ countries to support the stability and balance of oil markets.

Russia, in response to Saudi Arabia’s announcement, also confirmed it would continue an additional voluntary supply cut of 300,000 bpd from its crude oil and oil product exports until the end of December.

OPEC+ has been implementing production cuts since last year to proactively maintain market stability. While oil prices hit a high in 2023, trading near $98 a barrel for Brent crude in September, they have since softened and have been trading around $85 a barrel lately, despite geopolitical tensions in the Middle East.

Saudi Arabia, OPEC’s de facto leader, began the voluntary cuts in July as an addition to the broader supply-restriction deal first struck by some OPEC+ members in April.

In September, the kingdom extended its voluntary cut until the end of the year and pledged to review the decision every month.

The market had widely predicted that Saudi Arabia would confirm an extension of its cut until December. OPEC+ had previously decided in June to limit oil supply until 2024.

The alliance is scheduled to convene for its next meeting in Vienna on November 26, where it will further assess the situation and decide on any necessary adjustments to its oil production policy.