Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, said Sunday that it would extend cuts in oil production through June, noting that it was acting “in coordination with some” other states. Saudi allies including Kuwait and the United Arab Emirates said Sunday that they would also continue their reductions.
The decision to keep output cuts in place was expected and appears intended to bolster what might otherwise be weak oil prices. Some analysts forecast that the supply of oil will exceed demand in the first half of this year. Without continued cuts, prices might sink.
Saudi Arabia described the move as “precautionary.” Holding back oil production has “the aim of supporting the stability and balance of oil markets,” the kingdom said in a statement carried by the official Saudi Press Agency.
The Saudis said that the one million barrels a day that they began cutting in July “will be returned gradually, subject to market conditions.”
Giacomo Romeo, an analyst at the investment bank Jefferies, said on Sunday that the decision confirmed that the group was “not in a hurry to return” supplies.
The Saudis are selling much less oil than they are capable of producing, as countries outside OPEC, especially the United States and Guyana, increase their production. Russia, a member of OPEC Plus, has also managed to produce more oil than some analysts expected after its invasion of Ukraine in 2022.
