Page 127 - RusRPTJul23

voluntarily reduced its oil output by 500,000 barrels per day and would extend this reduction until 2025. Similarly, Saudi Arabia reportedly made the same decision regarding its voluntary output decrease, as reported by newswire SPA, citing a source from the Energy Ministry of Saudi Arabia.
Additionally, the newswire reported that Saudi Arabia plans to cut its production by 1mn barrels per day in July for one month and may consider extending the additional reduction.
Novak emphasized that Russia and Saudi Arabia were in agreement on the oil output changes and that the decision was a joint one. He stated, "No, we had no disagreements, this is a joint decision. As far as you know, our agreement is being fulfilled in the interests of the markets of the states that participate in the agreement."
Saudi Arabia's decision to significantly reduce its oil output came as a surprise to many during the recent OPEC+ talks in Vienna at the end of May, according to several sources within OPEC+. Some member states were only informed about the output cut during the final news conference, leaving them unaware of the details beforehand.
The Saudi Energy Minister, Prince Abdulaziz bin Salman, has a history of using surprise tactics to manage oil markets. With global economic concerns impacting demand and putting pressure on oil prices, Prince Abdulaziz has been proactive in addressing these challenges.
Days prior to the OPEC+ meeting, Prince Abdulaziz had warned short sellers, who bet on falling oil prices, that he would cause them more trouble. Referring to the output cut as a "Saudi lollipop," he announced the reduction after the meeting concluded.
Four OPEC+ sources, representing their respective countries' delegations, revealed that they only learned about the Saudi output cut during the Sunday evening news conference. Interestingly, the topic of a cut did not arise during the weekend discussions focused on a broader deal to limit supply until 2024.
Saudi Arabia stated that it would reduce its output by 10% or 1mn barrels per day (bpd) to reach 9mn bpd in July. Furthermore, if necessary, they expressed a willingness to extend the cuts even further. On the other hand, while OPEC+ agreed to extend existing cuts until 2024, they did not commit to any additional cuts in 2023.
127 RUSSIA Country Report July 2023 www.intellinews.com