How Russia will benefit from fresh oil production cuts

How Russia will benefit from fresh oil production cuts

The shock announcement by several OPEC+ members to voluntarily cut their oil production by more than a million barrels per day from May has sent world oil prices soaring, in a move widely seen as the tightening of the bond between Russia and Saudi Arabia.

This is what you need to know about Sunday's decision by some members of the Organization of the Petroleum Exporting Countries (OPEC) and their allies:

- Why cut oil production further? -

Independent of the broader OPEC+ output policy, eight members of the bloc led by heavyweight Saudi Arabia announced they would cut a further 1.16 million barrels per day of production until the end of the year.

It came on top of a decision from Russia -- also an OPEC+ member -- to extend a cut of 500,000 barrels per day.

Unlike two previous cuts, several members preferred to act independently on Sunday, without going through the formal framework of the alliance that requires the agreement of the 13 countries of the OPEC cartel and its 11 partners (OPEC+).

"What we are witnessing is an adaptive and agile OPEC+ group which is able and willing to act ahead of the curve," SEB analyst Bjarne Schieldrop said.

Established in 1960, Vienna-based OPEC