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OPEC members agree to reduce oil production by more than one million barrels per day beginning next month
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1 year agoon
Saudi Arabia, the United Arab Emirates, Iraq, Kuwait, and Algeria are among the OPEC members who have announced voluntary cuts to oil production of more than one million barrels per day from May to December.
OPEC members including Saudi Arabia, the UAE, Iraq, Kuwait, and Algeria have abruptly announced that they will voluntarily reduce their daily oil production by more than one million barrels from May to December. They claim that this is a preventative measure to help the oil market remain stable.
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Members of OPEC announced a reduction in oil production:
The group, which consists of 23 countries that produce oil, decreased its overall output by two million barrels per day the year before, and it is anticipated that they will maintain the agreed-upon production levels at their upcoming virtual meeting.
Reasons for OPEC’s desire to reduce oil production
OPEC members Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, Algeria, and Oman unexpectedly announced a reduction in oil production during a virtual meeting of the OPEC Plus ministerial panel in order to stabilise the market.
The reductions, which are scheduled to start in May and last through the end of the year, will be the biggest since October 2022, when oil producers reduced production by two million barrels per day. After oil prices dropped to $70 per barrel last month and there were worries that the global banking crisis might have an impact on demand, the decision was made.
The following production reductions have been declared, per official statements from OPEC Plus members:
- Russia: 500,000 barrels per day (bpd)
- Saudi Arabia: 500,000 bpd
- United Arab Emirates (UAE): 144,000 bpd
- Kuwait: 128,000 bpd
- Kazakhstan: 78,000 bpd
- Algeria: 48,000 bpd
- Oman: 40,000 bpd.
These cuts, which were made public during a televised meeting of the OPEC Plus ministerial panel, will take effect in May and last through the end of the year in an effort to stabilise the oil market. It is important to note that everyone’s adherence to their set quotas will be necessary for the production cuts to be successful.
