Saudi Arabia’s cabinet, or Council of Ministers, have backed what it considers to be precautionary measures taken by the Organisation of Petroleum Exporting Countries, OPEC+ to stabilize the oil market.
It said it would continue to boost OPEC+ precautionary efforts to support the stability of the oil markets, Kingdom officials said.
Saudi Arabia, the world’s largest oil exporter, said last week that it would extend its 1 million barrel per day production cut through the month of September, past its original deadline at the end of August.
Saudi Arabia also suggested at the time that that could be extended even beyond September and could also be deepened should the market conditions warrant such a move. With the cut extension, Saudi Arabia’s oil production for September would be 9 million barrels per day bpd if it adhered to its self-assigned quota.
But oil prices began to fall on Tuesday on weak China data, with Brent crude futures sinking by 0.76 per cent.
Saudi Arabia’s cabinet reaffirming that it supports OPEC+ “precautionary” efforts to stabilize the markets isn’t quite as strong a commitment as its years-ago promise of “whatever it takes,” but the jawboning could at least arrest the price slide.
Saudi Arabia is carrying the bulk of the group’s production cut promises, along with Russia the latter which has run up against price caps and import bans as the West attempts to keep oil money from flowing to the nation that could perpetuate its war in Ukraine.
Because of its disproportionate production cuts much of which is voluntary Saudi Arabia’s support in holding back OPEC+ production is crucial to the group’s oil-price-persuading power.
Brent crude was trading at $84.69 per barrel on Tuesday down $.65 on the day, and down from this time last week despite the production cut extension.