Saudi Arabia’s big decision regarding crude oil, the hopes of OPEC+ countries got a blow
On Sunday, Saudi Arabia has taken a big decision regarding crude oil. Saudi Arabia says it will cut oil production by a further one million barrels per day despite fears of a worldwide recession. To increase the prices, this decision has been taken to reduce the production.
Saudi Arabia made this announcement after a meeting of the 13-member Organization of Crude Export Countries (OPEC) and its 10 partners led by Russia. According to experts, OPEC+ countries were expected to maintain the current policy regarding crude production. But now this decision from Saudi side to cut production is shocking for everyone.
Crude prices have shot up after this decision. In such a situation, the hope of another cheap petrol-diesel in India has suffered a setback.
What did Saudi decide
Saudi Arabia has decided that it will extend its 500K barrel per day cut until 2024. Saudi Arabia will cut an additional one million barrels per day. Iraq will extend the cut to 211K barrels per day until 2024. Russia will extend voluntary production cuts until 2024. OPEC agrees to a new production target of 40.5 million barrels per day.
What will be the effect of the decision
Earlier in April, several OPEC+ members voluntarily agreed to cut production by more than one million bpd. At the same time, another cut can prove to be troublesome for crude importing countries like India. Because after cheap crude, there was hope in India that the prices of petrol and diesel would be cut.
According to Bloomberg news, the UAE was pushing for a change in the way it measures its production cuts. Several OPEC+ countries—including Angola and Nigeria—which are already operating at maximum capacity—are struggling to meet their quotas.
