Saudi Arabia To Reduce Oil Production

Objectivity 4.8 | Credibility 4.8 | Relevance 4.8

Saudi Energy Minister Abdulaziz bin Salman has announced that Saudi Arabia will unilaterally reduce oil production by one million barrels per day starting in July.  He said that Saudi Arabia was prepared to “do whatever is necessary to bring stability to this market” after previous cuts by OPEC+ countries didn’t produce a price increase.  The reduction comes as the Saudis see economic uncertainty in the U.S., Europe and even China. Last year OPEC+ countries reduced oil production by about 3.5 million barrels per day, causing a price spike to $87 per barrel but price recently slipped below $70 per barrel. The International Monetary Fund estimates that Saudi Arabia needs around $81 per barrel to meet its commitments, including infrastructure and economic diversification.  But any cuts to production and subsequent price increase is a balancing act as high gas pries can further fuel inflation.