Saudi Arabia announced on Monday that it would extend a voluntary cut in oil output, while Russia indicated it would limit exports as major producers moved to prop up falling prices.
Riyadh’s decrease of one million barrels per day was announced following a June conference of oil producers and went into effect over the weekend.
Saudi Energy Minister Prince Abdulaziz bin Salman noted at the time that it was “extendable”.
The official Saudi Press Agency stated it “can be extended” further in a story on Monday stating that the cut would last through August, citing an energy ministry source.
“The source confirmed that this additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets,” SPA said.
Also on Monday, Russia unveiled its export cut of 500,000 bpd for August “as part of efforts to ensure that the oil market remains balanced”.
The declaration by Alexander Novak, Russia’s deputy prime minister in charge of energy strategy, follows a reduction in Russian oil production of the same volume this year as part of Moscow’s response to Western sanctions imposed over the Ukraine war.
Recent OPEC+ initiatives to boost prices by lowering output have failed, and analysts are skeptical that this time would be any different, despite initial increases recorded Monday.
“It’s the usual knee-jerk reaction to reports of production cuts,” said IG analyst Chris Beauchamp.
“But given… it’s not a coordinated move from all (OPEC+) members it seems hard to imagine there’s much more upside in this.”
