Saudi Arabia has urged OPEC to further cut oil production |
[ Time:2020-05-19 | Hits:458 ] |
| On May 17, Saudi Arabia urged its OPEC members and non-opec producers to further cut oil output in order to speed up the rebalancing of the oil market. In a statement, Saudi Arabia said: "Saudi Arabia's action is aimed at urging the participating OPEC countries and other oil producers to stick to their commitments to cut output and provide additional reductions in production to help restore balance to the global oil market. Saudi Arabia had earlier announced it would cut output by a further 1m barrels a day to 7.5m barrels a day to support frustratingly low oil prices. The combination of plunging oil prices and the spread of the disease caused Saudi aramco's first-quarter profits to shrink by a quarter. With oil revenues plummeting, the government has had to take steps such as tripling VAT, suspending living allowances introduced in 2018 and cutting public spending by more than $26bn. The price of brent crude fell 65.6 per cent in the first quarter, led by increased output from Saudi Arabia and its OPEC "friend" Russia, as well as the heavy drag on global oil demand caused by the pandemic. As a result, Saudi Arabia found itself with millions of barrels of oil that it could not find a buyer for. In April, OPEC agreed to cut production by 9.7 million barrels a day starting in May. However, the cut was too low for the oil market, and the decision did not have a lasting impact on oil prices, which have accelerated as global oil demand has been hit by the pandemic. |