Moscow and Riyadh have both announced voluntary output cuts in a bid to prop up crude prices
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Russia is about to surpass Saudi Arabia as the top OPEC+ crude producer, the International Energy Agency said in its monthly oil market report last week.
Saudi Arabia’s total crude output should drop to 9 million barrels a day (bpd) through July and August, after it decided to prolong its production cut in an effort to balance prices, according to IEA estimates.
This volume of output would be the lowest the kingdom has produced in two years and would make Russia the top oil producer in the OPEC+ group of crude exporters, the agency said.
Earlier this month, Riyadh announced it would extend its voluntary crude output cut of 1 million bpd for another month to include August, while Russia simultaneously announced a 500,000 bpd reduction in exports next month. The cuts will amount to 1.5% of global supply.
In June, Saudi Arabia produced 9.98 million bpd, while Russia pumped 9.45 million bpd, according to IEA data.
Saudi Energy Minister Prince Abdulaziz bin Salman earlier highlighted deep cooperation between Riyadh and Moscow as part of the OPEC+ group, and pledged to do “whatever necessary” to support the oil market.
The latest round of crude cuts comes on top of voluntary reductions of 1.66 million bpd that some OPEC+ members first declared in April, and then agreed to extend until the end of 2024.
OPEC+ is a group comprising the Organization of the Petroleum Exporting Countries and allies, including Russia, which pumps around 40% of the world’s crude. It has been cutting oil output since November 2022.
READ MORE: IEA trims oil demand outlook
Meanwhile, Russian oil shipments slumped in June to their lowest volume since 2021, in a sign that Moscow is carrying out its plan for a voluntary cut after months of robust exports earlier this year.
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