Higher oil prices would help fill Russian President Vladimir Putin's coffers as his country wages war on Ukraine and force Americans and others to pay even more at the pump amid worldwide inflation.
Saudi Aramco engineers walk in front of a gas turbine generator at Khurais oil field during a tour for journalists, about 93 miles east-northeast of Riyadh, Saudi Arabia, on June 28, 2021.
It was also likely to further strain ties with the United States, which has called on Saudi Arabia and other allies to increase production as it tries to bring prices down and squeeze Russia’s finances. However, Book said there are a number of complex variables in oil and gas prices. The size of each country’s production cut depends on the baseline production number it is using, so the cut might not be 1.15 million. It also could take much of the year for the cuts to take effect. Demand could fall if the U.S. enters a recession caused by the banking crisis. But it also could increase during the summer as more people travel.
Saudi Arabia announced the biggest cut among OPEC members at 500,000 barrels per day. The cuts are in addition to a reduction announced last October thatThe Saudi Energy Ministry described the move as a “precautionary measure” aimed at stabilizing the oil market. The cuts represent less than 5% of Saudi Arabia’s average production of 11.5 million barrels per day in 2022.
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