Saudi Arabia, Algeria, the United Arab Emirates, Iraq, and Kuwait announced that they would reduce their oil production. The Gulf countries presented the measure as a “precaution” to guarantee the stability of the oil market. Saudi Arabia, the United Arab Emirates, and Kuwait jointly announced that they will reduce their production by a total of 772,000 barrels per day from May until the end of the year.
Iraq, one of the world’s largest oil producers, announced a reduction of 211,000 barrels per day from May 1 until the end of the year. Algeria also reported that it will voluntarily reduce its oil production by 48,000 barrels per day from May until the end of 2023 in coordination with some OPEC and non-OPEC countries. Russia, a member of the OPEC group of partner countries, announced that it will extend an oil production cut of 500,000 barrels per day until the end of the year.
Oil-producing countries are taking measures to balance the market and avoid a drop in oil prices due to oversupply. Reducing oil production may increase oil prices in the global market. In addition, this measure may benefit producing countries, as higher oil prices will allow them to earn higher export revenues and thus improve their economic situation.
The measure can also help stabilize oil markets and prevent a sharp drop in prices, which can have a negative effect on the global economy. Reducing oil production is a strategic move to control oil supply and demand in the world market and ensure oil market stability.