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Saudi Arabia and Russia announce new oil production cuts

By illuminem briefings 🌎

Jul 04 2023 · 1 min read

Illuminem Voices
Energy · Mining & Metals · Oil & Gas

illuminem summarizes for you the essential news of the day. Read the full piece from The Financial Times here or enjoy below!

🗞️ Driving the news: This week Saudi Arabia and Russia, the two most influential members of OPEC+, have announced plans to extend or implement additional oil production cuts in August
• Despite previous production cuts, oil prices have decreased by 32.67%

🔭 The context: Saudi Arabia, led by Energy Minister Prince Abdulaziz bin Salman, is particularly eager to raise oil prices as the country seeks to finance its ambitious investment program
• Russia, on the other hand, is grappling with the need for higher prices to support its involvement in the conflict in Ukraine and counter Western-imposed sanctions

🌎 Why does it matter for the planet: The decision to influence oil pricing by Saudi Arabia and Russia could strain Saudi-U.S. relations, as the U.S. seeks lower oil prices, and could shift dynamics within the international energy market

⏭️ What’s next: As the OPEC+ group convenes in Vienna, the market will closely observe Russia's compliance with the announced voluntary cuts
• As desires a higher price to fund its war in Ukraine, having lost a large part of its gas export revenues to Europe after it largely cut off supplies last year

💬 One quote: "Saudi Arabia's decision to extend its voluntary cuts highlights its determination in preventing [oil] inventories from building amid all the demand uncertainties currently plaguing the market." ( Amrita Sen, Founder and Director of Research at Energy Aspects)

📈 One Stat: Oil prices have fallen from their peak last year, with Brent crude currently trading near $76 a barrel and US benchmark West Texas Intermediate hovering around $71 a barrel

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