ALBAWABA - Oil prices surged by 6 percent, hours after surprise production cut announced by several of the world's largest exporters.
In Washington, the White House was quick to react to the planned production cut by OPEC+ oil producing members, saying the decision was "ill-advised" under the current market conditions.
The White House said the OPEC+ decision to cut oil production by 1 million barrels a day was ill-advised under current market conditions https://t.co/Xtx4t5MzK1
— Bloomberg (@business) April 3, 2023
Brent crude oil jumped by more than $4, or 5 percent, to trade above $84 a barrel in Asia.
BREAKING: Oil prices soar almost 6% after OPEC+ output cut https://t.co/mMJs38eC4R
— Insider Paper (@TheInsiderPaper) April 3, 2023
The increase came after Saudi Arabia, Iraq and several Gulf Arab states said on Sunday they were cutting output by more than 1 million barrels a day.
BREAKING: Saudi Arabia says it will cut oil production by 500,000 barrels per day from May until the end of 2023. The move would likely raise oil prices, further straining relations between Riyadh and Washington as the world copes with inflation. https://t.co/FOgr0zdirP
— The Associated Press (@AP) April 2, 2023
Russia, meanwhile, said it will extend its cut of 500,000 barrels a day until the end of the year.
Russia extended until the end of 2023 the decision to reduce oil production by 500 thousand barrels per day.
— Spriter (@Spriter99880) April 2, 2023
OPEC and other countries (Saudi Arabia, UAE, Iraq, Kuwait, Oman and Algeria) have also said they will cut production before the end of the year. pic.twitter.com/fRRMwTiLRi
The reduction in output is being made by the OPEC+ oil producing nations, which account for about 40 percent of all the world's crude oil output.
Saudi Arabia said it was cutting output by 500,000 barrels per day as of May and until the end of the year. Iraq's cut is estimated at 211,000.
The United Arab Emirates, Kuwait, Algeria and Oman are also slashing production.
Oil surges after OPEC+ blindsides market with production cut https://t.co/p1LiCQuAvW pic.twitter.com/so8vH14Gwm
— Bloomberg Middle East (@middleeast) April 3, 2023
The state Saudi Press Agency quoted a Saudi energy ministry official as saying that the move was "a precautionary measure aimed at supporting the stability of the oil market."
The BBC quoted independent oil analyst Nathan Piper as saying the Opec+ move "appeared to be an attempt to keep the oil price above $80 a barrel in the medium term, given that demand could be hit by a weakening global economy and sanctions have had a 'limited impact' on restricting Russian oil supplies."
