Riyadh intends to reduce its daily oil production by an additional one million barrels starting next June, after its decision to raise the value-added tax rate and stop the cost of living allowance, and Kuwait and the UAE are taking the same step.
Saudi Arabia announced on Monday that it intends to reduce its daily oil production by an additional one million barrels starting next June, in an attempt to help the market restore its balance and raise prices in light of the decline in demand due to the emerging Corona virus.
A Saudi official source told the government news agency that the Energy Ministry “directed Aramco to reduce its production of crude oil for next June with an additional voluntary amount of one million barrels per day.”
This amount is added toThe reduction that I committed to The Kingdom is in the recent “OPEC Plus” agreement. Thus, the volume of the reduction will be about 4,8 million barrels compared to April, and therefore its production for the month of June will be 7 million and 492 thousand barrels.
The Ministry also directed the company to seek to reduce its production in the month of May from the target level of 8 million and 492 thousand barrels per day, in accordance with its customers.
The source emphasized that the Kingdom aims from this additional reduction “to motivate the countries participating in the OPEC Plus agreement, and other producing countries, to commit to the ratios of the reduction committed to them, and to provide more reduction in their production, in an effort to support the stability of global oil markets.”
Saudi Arabia, the world’s largest oil exporter, is facing an unprecedented economic crisis with falling oil prices and closures related to the emerging Corona virus, including the suspension of the ritual pilgrimage to millions of people annually.
And earlier today, Monday, she decided Saudi Arabia raises the value-added tax rate and stops the cost of living allowance as part of new austerity measures imposed by measures to curb the spread of the emerging Corona virus and the decline in oil prices.
And Riyadh recorded Impotently In the budget every year since the beginning of the significant decline in oil prices in 2014. The International Monetary Fund predicted in April that the Saudi economy would contract by 2.3 percent this year.
At a later time, Kuwaiti Oil Minister Khaled al-Fadil revealed that his country would voluntarily reduce its oil production by 80,000 barrels per day in June, above its commitment under the “OPEC +” agreement.
Likewise, the UAE announced today, Monday, that it will make an additional reduction in its oil production by 100 thousand barrels per day in the next month, above its obligations under the “OPEC +” agreement, similar to Saudi Arabia and Kuwait.