Today we’re talking about oil crude markets.
In July OPEC cut oil production again.
Saudi Arabia announced it would extend its 1 million barrels per day unilateral production cut for July into August, saying it is doing so „with the aim of supporting the stability and balance of oil markets”.
Early in July, the OPEC+ producers decided to keep the current cuts until the end of 2024, but OPEC’s top producer, Saudi Arabia, said it would voluntarily reduce its production by 1 million barrels per day in July, to around 9 million barrels per day. The cut could be extended beyond July, Saudi Energy Minister Prince Abdulaziz bin Salman said.
The Saudi energy minister called it a sweet treat for prices: “I would have to call it the Saudi lollipop, which is a million barrel of reduction for the start, that starts the 1st of July. And that million is also extendable.” Inside OPEC+, Saudi ‘lollipop’ oil cut was a surprise too.
The production level in July would be Saudi Arabia’s lowest since 2011, excluding the initial cuts after the Covid outbreak in 2020 and the lowered production after the attack on Aramco’s facilities in September 2019. The only time when Saudi Arabia was producing 9 million barrels per day or less on a sustainable basis was in peak COVID period in early 2021 and during the Great financial crisis of 2008.
Now we are here…
That’s all for this episode of the Energy & Policy.