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Saudi Arabia said on Monday that it had asked oil giant Aramco to cut its output by an additional 1 million barrels per day since June, to support prices that have collapsed during the coronavirus crisis.
The move will cut production from the world’s largest crude exporter to 7.5 million bpd, the energy ministry said in a statement quoted by the official Saudi press agency.
Kuwait’s neighboring oil minister Khaled al-Fadhel said separately that his country would cut an additional 80,000 bpd to support the Saudi initiative.
“Kuwait supports Saudi Arabia’s efforts to restore balance to the oil market,” Fadhel said in a statement at the Kuwait News Agency.
It also declared its support for Saudi Arabia, its ally, the United Arab Emirates, which announced a reduction of 100,000 bpd since June.
OPEC and its allies in the OPEC + group agreed last month to cut production by a record 9.7 million bpd, while other producers pledged to cut their production by around 3.7 million bpd.
Under the agreement, Saudi Arabia’s daily output fell to 8.5 million bpd, the lowest in more than a decade.
Riyadh said the objective of the further cut was to put pressure on OPEC + members “and other producing nations to comply with the committed production cuts and make further cuts” to stabilize the world oil market, the energy ministry said.
Despite a first round of massive cuts that started on May 1, oil prices remain extremely low, losing around two-thirds of their value this year due to a drop in demand fueled by the coronavirus.
Prices were further lowered in April by a price war between Russia and Saudi Arabia during which Riyadh’s output soared to a record 12.3 million bpd, taking reserves to unsustainably high levels.
The ministry said that with the latest reduction in production, the kingdom would have cut 4.8 million bpd from record production levels in April.
The international benchmark Brent crude price is around $ 30 per barrel.
