the State company of Saudi Arabia Saudi Aramco will reduce oil production by a million barrels a day additionally, and do it alone, without coordination with the partners in OPEC+ or other countries. This is stated in the decree of the Ministry of energy of the Kingdom, according to Reuters.
Thus, the total restriction of output will amount to 5 million barrels per day, counting from the April high, and 3.5 million — if you take the strap in the agreement of OPEC+.
At the same time, Riyadh hopes to convince other countries that made commitments to rescue the oil market, to fulfill the quotas and not to go beyond prescribed limits. The new cut will take effect in June.
On this information, the oil price rose sharply. The July Brent futures rose above 31 dollars per barrel, and WTI is above 25.5 per dollar. From the beginning of day oil quotations have gone down on concerns about the second wave of coronavirus.
Earlier it was reported that Saudi Arabia June 1, suspends the payment of a living wage, and from 1 July increases three times, from 5 to 15 percent, the value added tax. Such measures as the Kingdom had to go because of the growth of the budget deficit, which in the first quarter of the year amounted to nine billion dollars.
prior To this, Saudi Aramco refused to continue price war with Russia and reduced discounts on its own grade of oil for European buyers.