Saudi Arabia’s Deeper Cuts Propel OPEC’s Crude Output to Fastest Decline in 3 Years, Brent Surges Above $85

Saudi Arabia implemented deeper cuts to help international markets, causing OPEC’s crude output to decline at its fastest rate in three years. According to a poll, OPEC’s production decreased by 900,000 bpd last month, to an average of 27.79 million bpd. The organisation had reduced supply during the worst of the 2020 coronavirus pandemic, but this was the biggest decline since then. Saudi Arabia nearly carried through its promise to reduce production by an additional 1 million barrels per day in an effort to raise prices amid concerns about a US recession. As supplies throughout the world tighten, oil prices have risen, with recently reaching a three-month high above $85 per barrel. 

According to the report, Saudi Arabia’s production in July was 9.15 million bpd on average. Nigeria’s oil supply decreased by 130,000 bpd to 1.26 million bpd in July as the nation’s efforts to increase output were stymied by a leak at the Forcados petroleum port. A setback was also experienced by Libya’s oil output, which dropped by 50,000 bpd to 1.1 million bpd as a result of protesters temporarily stopping operations at the Sharara field.

Russia, a larger member of the organisation known as OPEC+, has provided Saudi Arabia with some assistance in sustaining the market. For months, Russia ignored commitments to reduce supplies as it concentrated on increasing revenue to guarantee funding, but evidence from tanker tracking reveals Russia is finally reducing exports. A seven-month low of slightly under 3 million barrels per day have been reached in oil shipments.