Saudi Arabia and Russia plan to reduce the amount of oil they pump to the world in a bid to prop up prices, illustrating how two of the world’s top oil producers are scrambling to boost income from fossil fuels despite weak demand.
The decision gave a slight boost to oil prices on Monday, and it comes after Riyadh announced a significant production cut for the month of July during the last meeting of the “OPEC Plus” alliance, which raised fears that gasoline prices in the United States may start to rise.
And the Saudi Ministry of Energy said that it would extend the oil production cuts in July, amounting to one million barrels per day, to August, to enhance “stability and balance in the oil markets.”
This keeps the Gulf country’s oil production at 9 million barrels per day.
Meanwhile, Russian Deputy Prime Minister Alexander Novak said that his country will reduce its oil production by an additional 500,000 barrels per day in August, according to Russian news reports.
The voluntary cuts come on top of previous cuts, which the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and allied producers led by Russia agreed to extend until next year.
But those cuts haven’t always supported oil prices, helping American drivers affordably fill their tanks during the busy summer travel season and providing consumers around the world with some relief from inflation.
The average price of a gallon of gas in the United States is $3.53, according to the AAA Automobile Club, down $1.28 from last year.
The US crude oil price index rose 77 cents, on Monday, to reach 71.41 dollars a barrel, while the international benchmark crude oil price rose 70 cents, to 76.11 dollars a barrel. They both lost part of their winnings.
The price of US crude fell for some time, and last Friday it exceeded $70 a barrel for the first time in five weeks.
2023-07-03 18:01:34
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