Saudi Arabia, Russia and several OPEC+ producers extend voluntary crude supply cuts until end of June

Heavyweights
Saudi
Arabia
and
Russia,
alongside
several
other
key
OPEC+
producers,
will
extend
their
voluntary
crude
supply
cuts
until
the
end
of
the
second
quarter.

OPEC+
refers
to
the
coalition
of
the
Organization
for
the
Petroleum
Exporting
Countries
and
its
allies,
steered
by
Riyadh
and
Moscow.

Saudi
Arabia
will
stretch
out
its
voluntary
crude
production
cut
of
1
million
barrels
per
day
until
the
end
of
the
second
quarter,
the
state-owned
Saudi
Press
Agency

said
Sunday,
citing
an
official
source
from
the
country’s
Ministry
of
Energy.

Riyadh’s
crude
production
will
be
approximately
9
million
barrels
per
day
until
the
end
of
June,
the
announcement
said.

Russia
will
trim
its
production
and
export
supplies
by
a
combined
471,000
barrels
per
day
until
the
end
of
June,
Russian
Deputy
Prime
Minister
Alexander
Novak
said,
according
to
a
Google-translated

report
carried
by
Russian
state-owned
agency
Tass.
Moscow
had
volunteered
to
reduce
its
supplies
by
a
slightly
higher
500,000
barrels
per
day
in
the
first
quarter.

OPEC
key
producers
Iraq
and
UAE
will
also
prolong
their
voluntary
production
cuts
of
220,000
barrels
per
day
and
163,000
barrels
per
day,
respectively,
until
the
end
of
the
second
quarter,
according
to
Google-translated
updates
from
their
state-owned
news
agencies

INA
and

WAM.

Back
in
November,
OPEC+
countries
had

held
a
formal
policy
of
collectively
reducing
their
output
by
2
million
barrels
per
day
until
the
end
of
2024.
Separate
from
the
group’s
official
strategy,
several
OPEC+
producers,
including
heavyweights
Saudi
Arabia
and
Russia,
announced
they
would
voluntarily
trim
their
supplies
by
a
total
of
2.2
million
barrels
per
day
until
the
end
of
this
year’s
first
quarter. 

The
latest
production
cut
announcement
comes
against
a
background
of
a
languishing
oil
price
that
has
largely
spasmed
in
a
narrow
$75
to
$85
per
barrel
interval
since
the
start
of
the
year,
despite
OPEC+
supply
cuts,
persistent
Houthi
maritime
attacks
in
the
crucial
Red
Sea
route
and
ongoing
spill-over
risk
from
Israel’s
war
against
the
Iran-backed
Palestinian
militant
group
Hamas
in
the
Gaza
Strip.
Offsetting
some
of
this
price
support
in
the
short
term
is
lower
demand
amid
imminent
seasonal
refinery
maintenance
in
the
world’s
top
crude
importer,
China,
which
typically
exacerbates
in
the
second
quarter.

Unlike
formal
policy
changes,
voluntary
cuts
do
not
require
the
group’s
unanimous
consent
during
an
official
meeting
and
bypass
the
need
to
distribute
production
cuts
or
increases
among
OPEC+
members.
Typically,
extracurricular
output
adjustments
are
not
disputed
by
OPEC+
countries,
as
long
as
they
align
with
the
spirit
of
existing
policy
—
currently,
the
supplementary
cuts
build
on
existing
OPEC+
trims.

The
group’s next
policy
negotiations take
place in
June,
by
which
point
independent,
third-party
data
providers
will
have
finalized
their
assessments
of
group
members’
production
capacity
baselines
—
the
levels
to
which
each
country’s
quota
is
assigned.
Heavily
coveted,
a
higher
baseline
leads
to
a
higher
output
limit,
allowing
producers
to
cash
in
on
firmer
revenues
in
a
lofty
price
environment.

In
a
shock
move,
OPEC
kingpin
Saudi-controlled
oil
giant
Aramco
in
late
January
announced
it
was

suspending
its
long-standing
plans
to
increase
its
crude
production
capacity
from
12
million
barrels
per
day
to
13
million
barrels
per
day
by
2027,
with
Saudi
Energy
Minister
Prince
Abdulaziz
bin
Salman
later

pinning
the
decision
on
the
green
transition.