THE Saudi Arabia announced today Sunday that it will proceed with another cut in oil production in July, as part of the wider OPEC+ agreement to limit production, in the hope that this move will increase the price of the “black gold”.

Saudi Arabia’s energy minister, Prince Abdelaziz bin Salman, said the 1 million bpd production cut could be extended beyond July if needed. This is a “voluntary” reduction, he explained at the press conference he gave after the meeting in Vienna of the 13 OPEC member countries and the ten cooperating countries, led by Russia.

Reductions applied since early May by 9 countries, including Saudi Arabia and Russia (a total of 1.6 million barrels per day) will be extended until the end of 2024, Russian Deputy Prime Minister Alexander Novak told reporters.

“The outcome of the discussions was the extension of the agreement until the end of 2024,” Novak said, noting that OPEC+ has collectively cut production by 3.66 million barrels per day to ensure market stability.

The negotiations lasted seven hours and the media reported disagreements between the 23 countries that together account for 60% of the world’s oil production.

Despite the surprise decision in April to cut production, the price of oil did not skyrocket as many analysts had feared. North Sea Brent is currently at $76 a barrel while US WTI crude is at $71, a far cry from the $140 the price reached in March 2022, at the start of the war in Ukraine.

Russia was wary against the further reduction of production, as oil finances its military operations in Ukraine. Moscow has nothing to gain from the price increase. Due to Western sanctions, it is allowed to export oil at or below $60 per barrel. Above this limit, companies (insurance, shipping) are prohibited from providing their services for the sea transport of black gold.

“We had no disagreements. It is a joint decision made in the interest of the market,” assured Novak.