Oil prices rose, this Monday 3rd April, after several exporting countries announced a cut in production in May, presented as a “precautionary measure” to stabilize the market.
At the opening of Asian markets, the price of a barrel of North American WTI rose 5.74% to $80.01 and a barrel of North Sea Brent rose 5.67% to $84.42.
The cut announced on Sunday by Iraq, Algeria, Saudi Arabia, the United Arab Emirates (UAE), Oman and Kuwait will start in May and last until the end of the year.
In total, it will mean a cut in production of around one million barrels per day, the biggest reduction since last October.
Riyadh will cut production by 500,000 bpd, Iraq by 211,000 bpd, the UAE by 144,000 bpd, Kuwait by 128,000, Algeria by 48,000 and Oman by 40,000, according to the respective official news agencies. .
The cuts will all take place from May until the end of 2023, “in coordination with some countries of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC”, according to the Algerian Ministry of Energy.
Oil demand is threatened by the “prospect of high inflation and recessive pressures”, said a Middle East Economic Survey analyst Yesar al-Maleki, also blaming the turmoil on the failure of US bank SVB and the rescue of Credit Suisse.
