Saudi Arabia will make additional, voluntary oil output cuts of one million barrels a day (b/d) in February and March as part of a deal under which most OPEC+ producers will hold production steady in the face of new coronavirus lockdowns.
The country is going beyond its promised cuts as part of the OPEC+ group of oil producers to support both its own economy and the oil market, Energy Minister Prince Abdulaziz bin Salman said on Tuesday.
The move follows two days of talks among OPEC+ producers that will see most members hold output steady next month.
Two producers – Russia and Kazakhstan – will be allowed to bump up their output by a combined 75,000 b/d in February and a further 75,000 b/d in March, Kazakhstan’s Energy Minister said.
DEBATE
Russia and Kazakhstan had pushed for the group to raise production by 500,000 b/d for February, as it had done for January, while others wanted no increase.
An internal OPEC+ document dated Jan. 4 seen by Reuters highlighted bearish risks and stressed that “the reimplementation of COVID-19 containment measures across continents, including full lockdowns, are dampening the oil demand rebound in 2021.”
Saudi Arabia’s Energy Minister on Monday urged caution, noting still-fragile fuel demand and the unpredictable impact of new variants of the coronavirus.
New variants of the coronavirus first reported in Britain and South Africa have since been found in countries across the world.
OPEC+ producers have been curbing output to support prices and reduce oversupply since January, 2017.
As COVID-19 hammered demand for gasoline and aviation fuel and slashed Brent oil prices, OPEC+ was forced to boost its output cuts to a record 9.7 million b/d in mid-2020.
This month’s 500,000 b/d rise in output narrowed OPEC+ cuts to 7.2 million b/d.
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