A Saudi Ministry of Energy official stated that Saudi Aramco will reduce its crude oil production in June by a voluntary amount of 1 million barrels of oil per day (mmbbl/d) or 1% of daily global oil supply, according to SPA.
This cut is in addition to the OPEC+ agreement signed in April. This voluntary cut will bring the total production cut by the Kingdom to around 4.8 mmbbl/d representing a 32% cut from April’s production levels, leaving the kingdom’s total production for June at 7.492 mmbbl/d. SPA also added that the ministry has directed Saudi Aramco to seek to reduce its production in May, from the target level of 8.492 mmbbl/d, in consent with its customers.
This decision was taken by Saudi Arabia in light of low oil prices and weak global oil demand due to the coronavirus pandemic. Saudi Energy Minister Prince Abdulaziz told Reuters that the deeper oil output cuts in June are designed to expedite draining a global supply glut and rebalance the oil market.
“The Kingdom aims through this additional cut to encourage OPEC+ participants, as well as other producing countries, to comply with the production cuts they have committed to, and to provide additional voluntary cuts, in an effort to support the stability of global oil markets,” a Saudi official said.