On Sunday, June 4, Saudi Arabia announced its plans to further cut oil supply in what is seemingly an attempt to boost oil prices amid global economic uncertainty.
- The move was an attempt to “stabilize” global economies amid uncertainty
- This was in addition to a previous oil cut implemented in April
- The cut is expected to extend till 2024
Saudi Arabia announced plans to cut back on oil supply voluntarily from ten million barrels per day (bpd) to nine million bpd.
Reportedly, OPEC+ (Organization of the Petroleum Exporting Countries) made no changes to its previous production cuts back in April. However, Saudi announced a further cut in output.
While Saudi’s Energy Minister claims that the intent of the supply cut is to stabilize the global economy, experts and analysts have reason to believe that the move is to increase the price of oil.
Price fluctuations in oil resulted from the onset of the Russia-Ukraine war that began in the early months of 2022. Not only did it result in an energy crisis but also an economic crisis in several countries.
This was not the first time that such a cut was made; since October 2022, OPEC+ announced an oil supply cut of up to 1.16 million bpd. And then, in April 2023, OPEC+ and its allies, including Russia, agreed to widen crude oil production cuts to 3.66 million bpd.
While the cuts would have multiple effects, consumers will bear most of the burden, as a reduction in supply is inevitably expected to increase the price of fuel in already unstable economic climates.
Whether the oil cuts are expected to continue extensively remains to be seen. However, the matter has prompted Real Research to launch a survey to see what the public has to say.
Answer the survey on Saudi Arabia’s decision to cut oil supply on the Real Research app from June 08, 2023. After that, you will receive 60 TNCs as a reward.
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