Saudi Arabia and Russia announce new oil production cuts

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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