RIYADH: Saudi Arabia’s cabinet has urged OPEC+ countries to further reduce oil production rates to restore balance in global crude markets, state news agency reported on Wednesday.
Saudi Arabia urged oil-producing nations not only to adhere to agreed cuts to production, but further reduce output to help restore balance in global oil markets
“The cabinet affirmed the Kingdom of Saudi Arabia’s endeavour to support the stability of global oil markets,” according to a statement.
“The Kingdom of Saudi Arabia’s initiatives aim at urging the countries participating in the OPEC+ agreement and other producing countries to adhere to the cut rates and to provide more reduction in production in order to contribute to restoring the desired balance of the global oil markets.”
In issuing the call to OPEC+, acting Minister of Media Majed Al-Qasabi said the Kingdom said it committed to supporting the stability of global oil markets. He said they will voluntarily reduce output by an additional 1 million barrels a day in June and will also try to implement additional cuts this month, with the consent of its customers.
The cabinet said the Saudi initiatives aim to encourage other countries, whether they have signed up to the OPEC+ agreement or not, to adhere to its reduced rates and to cut output even further to help stabilize global oil markets.
OPEC and its allies, a group is known as OPEC+, decided in April to cut output by 9.7 million barrels per day (bpd) for May and June, a record reduction, in response to the 30% drop in global fuel demand caused by the coronavirus pandemic.
Saudi Arabia said on Monday it would add to existing cuts by reducing output by another 1 million bpd next month – equivalent to 1% of global oil supply – slashing total production to 7.5 million bpd, down nearly 40 percent from April. The slump in oil prices has caused significant pain to the kingdom’s budget.