Russia, Saudi Arabia cut crude oil production after Brent price drops by 33%

Russia and Saudi Arabia have announced additional cuts in their crude oil production output for August, as the Organisation of the Petroleum Exporting Countries (OPEC) extended its decision to push prices back up.

The Russian deputy prime minister responsible for energy policy, Alexander Novak, on Monday, disclosed his country’s decision to cut crude production for the global market by 500,000 barrels per day.

According to Russian news agencies, Novak said production would be cut next month in order to balance the oil market, which has suffered from declining Brent crude oil prices.

Ripples Nigeria reports that within one year, the Brent crude oil price has plummeted by 33.5 per cent, wiping off $38 from the price, which was $113.50 per barrel on July 4, 2022, but currently trades at $75.40, as of the time of filing this report.

Novak was quoted to have stated: “As part of efforts to ensure that the oil market remains balanced, Russia will voluntarily reduce its oil supply in the month of August by 500,000 barrels per day, by cutting its exports by that quantity to global markets.”

Recall that in response to sanctions from Western countries for invading Ukraine, Russia had cut a similar volume of crude this year. The sanctions included Europe reducing its oil dependence on Moscow, forcing Russia to find new buyers in India and China.

The decision by Russia followed that of Saudi Arabia, which dropped production by one million barrels per day for the period of August.

Saudi Arabia had previously made a voluntary oil production cut of one million barrels per day in a bid to force crude oil prices back up.

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