Saudi Arabia extends voluntary cut of one million barrels of oil by one month

Saudi Arabia announced Thursday that it will extend its voluntary cut of one million barrels of oil per day until September, a reduction that could be extended in the future and even "increased", the official Saudi news agency SPA quoted an Energy Ministry source as saying.

"Saudi Arabia will extend the voluntary cut of one million barrels per day, which was implemented in July, for another month and will be implemented during September, with the possibility that this reduction could be extended or increased," SPA said.

While analysts were already expecting the extension of this unilateral measure, which will further boost the price of black gold, this reduction is in addition to the pumping cuts to which the Arab country has committed to the Organisation of the Petroleum Exporting Countries (OPEC). 

Last April, the country announced a unilateral voluntary cut in OPEC of another million barrels per day, which will run until the end of December 2023.

According to SPA, Saudi Arabia's production in September will be around nine million barrels of oil per day.

"This additional voluntary reduction has been taken to reinforce the precautionary efforts of OPEC+ countries (OPEC and its allies) to support the stability and balance of oil markets," the Saudi energy ministry source was quoted as saying by the agency. 

Saudi Arabia, which has around 17% of the world's crude oil reserves, has reduced its production on several occasions as part of the OPEC+ policy, which the Arab kingdom leads with Russia.

OPEC estimated in its June report that global demand for crude would grow by 2.4 million barrels per day in the second half of this year due to higher consumption in emerging economies.

The organisation has decided to reduce production to avoid a collapse in prices, which is causing the value of the black gold to rise.