According to the International Energy Agency (IEA), Russia is poised to overtake Saudi Arabia as the leading crude producer within the OPEC+ group. The IEA’s monthly oil market report revealed that Saudi Arabia’s total crude output is expected to decline to 9 million barrels per day (bpd) throughout July and August. This reduction is part of Saudi Arabia’s efforts to stabilize oil prices. If these estimates hold true, it would mark the lowest level of production for the kingdom in two years, ultimately allowing Russia to claim the top spot among OPEC+ crude exporters.
Earlier this month, Riyadh made the decision to extend its voluntary crude output cut of 1 million bpd for an additional month, encompassing August. Simultaneously, Russia announced a reduction in exports of 500,000 bpd for the following month. Combined, these cuts would constitute 1.5% of global supply. In June, Saudi Arabia produced 9.98 million bpd, while Russia pumped 9.45 million bpd.
Saudi Energy Minister Prince Abdulaziz bin Salman emphasized the strong cooperation between Riyadh and Moscow within the OPEC+ group. He vowed to take “whatever necessary” steps to support the oil market. The recent round of crude cuts supplements the voluntary reductions of 1.66 million bpd that certain OPEC+ members first declared in April. These reductions were subsequently extended until the end of 2024.
OPEC+ is composed of the Organization of the Petroleum Exporting Countries and its allies, including Russia. Together, they account for approximately 40% of the world’s crude production. The group has been implementing oil output cuts since November 2022 to stabilize prices.
Alongside the news of production cuts, Russian oil shipments in June experienced a significant decline. These shipments reached their lowest volume since 2021, indicating that Moscow is following through with its plan for a voluntary reduction after months of robust exports earlier this year.
In conclusion, Russia is on track to surpass Saudi Arabia as the leading crude producer within the OPEC+ group. As part of their efforts to stabilize crude prices, Saudi Arabia will see a drop in total crude output over the next two months, allowing Russia to claim the top position. These cuts come in addition to previous voluntary reductions by OPEC+ members and highlight the ongoing cooperation between Riyadh and Moscow. This development is expected to have a notable impact on global oil supply and prices in the coming months.
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