Saudi Arabia and its Opec+ allies this week agreed to extend a series of production cuts in a bid to stabilize markets which could provide additional price support (MEES, 6 December). The move comes as Saudi oil export revenues dropped to their lowest level since the first half of 2021 in September, as resilient non-Opec+ supply growth coupled with concerns over global economic growth have pushed prices for Arab Light well below $80/B since August.
The average Brent futures price of $73.40/B for November was comfortably below the May 2023 average of $75.69/B ahead of Saudi Arabia’s 4 June 2023 decision to unilaterally cut an extra 1mn b/d of production, despite seven other producers having agreed to add another 1.2mn b/d of voluntary cuts since January. With the price stimulus effect of these 2.2mn b/d of cuts dissipating, Saudi Arabia has been left with a combination of comparatively low prices and low-production, resulting in declining revenue. (CONTINUED - 851 WORDS)
