Saudi Arabia and Russia, the world's biggest oil exporters, deepened oil cuts on Monday, sending prices higher despite concerns over a global economic slowdown.

 

Saudi Arabia said it would extend its voluntary oil output cut of one million barrels per day (bpd) for another month to include August, adding that the cut could be extended beyond that month.

 

An official source from the Ministry of Energy announced that Saudi Arabia will extend the voluntary cut of one million barrels per day, which has gone into implementation in July, for another month to include the month of August that can be extended, said a Saudi Press Agency report.

 

In effect, the kingdom's production for the month of August 2023 will be approximately 9 million barrels per day, it said.

 

The Ministry of Energy source also noted that this cut is in addition to the voluntary cut previously announced by the kingdom in April 2023, which extends until the end of December 2024. 

 

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. 

 

Shortly after the Saudi announcement, Russian Deputy Prime Minister Alexander Novak said Moscow would cut its oil exports by 500,000 barrels per day in August, a Reuters report said.

 

The cuts amount to 1.5% of global supply and bring the total pledged by Opec+ to 5.16 million bpd.

 

Opec+ already has in place cuts of 3.66 million bpd, amounting to 3.6% of global demand, including 2 million bpd agreed last year and voluntary cuts of 1.66 million bpd agreed in April and extended to December 2024, the report said.

 

Oil prices rose on news of the cuts, with Brent up 89 cents to $76.30 a barrel by 0950 GMT.