Production growth from the US and Iran puts pressure on Saudi Arabia
The decision by Opec+ members to extend voluntary oil production cuts to July has merely delayed the difficult question of how long Saudi Arabia is willing to bear the weight of lower global output, say analysts. The series of cuts, which began in November 2022 in the face of vehement US opposition, has crimped production of crude by some 5.3mn barrels a day, or about 5 per cent of global supply.
Without the country’s aggressive production cuts, the price of crude could have fallen to as low as $65 per barrel, Galimberti said. “Saudi Arabia is basically shouldering the entire market and it’s painful, but without them it would be even more painful,” he said. In January, state-run Saudi Aramco paused a plan to expand the kingdom’s oil production capacity, in a move that some experts viewed as a recognition that it already has ample unused potential.
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