Saudi Arabia Slashes Oil Production As OPEC+ Extends Cuts Through Next Year

Saudi Arabia announced on Sunday it would cut one million barrels per day in its oil production starting in July as a unilateral step to boost the falling crude prices. 

The move came as OPEC+ members agreed during a meeting in Vienna to extend earlier production cuts through next year. Following the decision, Saudi Energy Minister Abdulaziz bin Salman said the group “will do whatever is necessary to bring stability to this market,” adding that the cuts could be extended. 

Although two previous cuts didn’t push oil prices higher, the new Saudi reduction of supply would likely reach its goal in the short term, experts told AP News. The impact would depend on whether the Gulf state extends the cut, senior vice president of oil markets research at Rystad Energy Jorge Leon was quoted as saying.

“Gas is not going to become cheaper,” Leon warned, noting that U.S. drivers will be affected by the decision. ”If anything, it will become marginally more expensive.”

OPEC+ has already dropped production to 4.6 million barrels a day. However, some countries can’t produce their quotes, which brings the actual reduction to nearly 3.5 million barrels per day.