- Wednesday, October 16, 2024
RIYADH, Saudi Arabia - Saudi Arabia has confirmed that it will maintain a production cut of 1 million barrels of oil per day until the end of the year, a move that is expected to support the current oil prices.
The announcement comes as oil prices hover around $90 a barrel. The initial production cuts, which were jointly announced by Saudi Arabia and Russia in July, have already had a significant impact on prices, benefiting Moscow financially and creating challenges for global efforts to control inflation.
In a statement posted on its website, the Saudi Energy Ministry reiterated its commitment to the production cuts through the end of the year. The statement, attributed to an official source, stated that the kingdom will continue to produce 9 million barrels per day in November and December.
The ministry also emphasized that the decision to cut production voluntarily will be reviewed next month. This review will consider the possibility of deepening the cut or increasing production.
As a result of this news, benchmark U.S. crude oil for November delivery rose by 41 cents to reach $89.23 a barrel on Tuesday. Similarly, Brent crude for December delivery rose by 21 cents to $90.92 a barrel.
The high oil prices are crucial for Saudi Arabia's Vision 2030 plan, an ambitious initiative spearheaded by Crown Prince Mohammed bin Salman. This comprehensive plan aims to diversify and transform the kingdom's economy, reduce dependency on oil, and create employment opportunities for the youth.
Saudi Arabia's commitment to maintaining the production cut underscores its determination to stabilize and strengthen the oil market.
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