OPEC+ agrees to extend voluntary production cuts of 2.2 million BPD until the end of 2025, with gradual easing starting in October 2024.
The decision aims to stabilize crude prices and balance market demands, reflecting Saudi Arabia’s efforts to reconcile diverse member interests.
Weak demand concerns in China and other major economies, coupled with record U.S. oil output, have contributed to falling oil prices despite OPEC+ cuts and Middle Eastern tensions.
Saudi Arabia set its flagship Arab Light crude oil official selling price (OSP) to Asia at plus $2.40 versus Oman/Dubai average for July, a document seen by Reuters showed on Wednesday.
Brent crude was trading down well over 3% on Monday, marking the first time the global benchmark has been below $80 since February, with the U.S. crude benchmark down over 3.5% following the OPEC+ agreement to start phasing out voluntary cuts in October.
Saudi Aramco’s $12 billion share sale sold out shortly after the deal opened on Sunday, in a boon to Saudi Arabia’s government as it seeks funds to help pay for a massive economic transformation plan.
Saudi Aramco’s net income for Q1 2024 fell due to lower crude sales.
The company maintained its $31.1 billion dividend payout despite the profit dip.
This prioritization of shareholder payouts over short-term profit raises questions about Aramco’s strategy.
Oil prices slid more than $1 a barrel on Monday, with Brent falling below $90, as Middle East tensions eased after Israel withdrew more soldiers from southern Gaza and committed to fresh talks on a potential ceasefire in the six-month conflict.
The Iraqi Minister of Oil, Hayan Abdul-Ghani, said that the Oil Ministry is taking steps to reach a production capacity of five million barrels per day despite the serious restrictions on oil markets and the OPEC countries’ quota limitations to maintain price stability.
Russia-Saudi oil cooperation is still going strong as part of the OPEC+ alliance, which will do “whatever necessary” to support the market, Saudi Energy Minister Prince Abdulaziz bin Salman told a conference on Wednesday.
The discovery was made by Saudi Aramco, a leading company in the production of energy and chemical products. This company is already recognized for locating new gas reserves in times of national decline.
Saudi Arabia’s government transferred a further $164 billion stake in Aramco to the Public Investment Fund, a move aimed at bolstering cashflow at the state-backed investor that’s ramping up spending on huge local projects.