The recent increase in international oil prices, primarily driven by Saudi Arabia’s intention to reduce daily production by nearly one million barrels, has raised concerns about the future of crude oil prices. As of Tuesday, June 7, 2023, the price of a barrel of Brent crude oil stands at $78.73 USD on the Inter Continental Exchange (ICE), compared to $71 USD at the end of the previous week.
The West Texas Intermediate (WTI), the American equivalent and a benchmark for crude oil pricing and oil futures contracts on the New York Mercantile Exchange (Nymex), also known as Texas Light Sweet, rose by 0.57% to $72.15 USD.
Saudi Arabia, as a prominent member of the Organization of the Petroleum Exporting Countries (OPEC), made the decision on Sunday, June 4, 2023, to implement a new production cut starting in July. This “unilateral action” was taken with the aim of boosting prices, as stated by KCM Trade analyst Tim Waterer.
The production cut announcement came after a meeting in Vienna of OPEC+ (the thirteen OPEC members along with their ten allies, led by Russia). Saudi Arabia expects this reduction in production to raise the price of oil to $80 USD per barrel.
The Democratic Republic of Congo, heavily reliant on oil imports, is likely to be impacted by this situation. Currently, the country’s daily oil production is estimated at 25,000 barrels per day.
