Saudi Arabia says it could deepen oil production cuts

Saudi Arabia says it could deepen oil production cuts

Saudi Arabia has warned it could deepen cuts to oil production as it extended its voluntary supply curbs with Russia for another month, despite a recent rally in crude prices threatening to revive tensions between Riyadh and Washington.

The Opec+ leaders have sought to prop up oil prices with a series of production cuts over the past year, frequently placing Riyadh at odds with the White House, which wants lower prices to support the economy ahead of next year’s election, while limiting revenues flowing to the Kremlin.

Saudi Arabia will prolong its 1mn-barrels-a-day production cut — first implemented in July and dubbed the “Saudi lollipop” or sweetener for the oil market by energy minister Prince Abdulaziz bin Salman — until the end of September, while Russia will cut oil exports next month by 300,000 b/d.

The Saudi cut could also be extended or “deepened”, the Saudi state news agency said on Thursday, citing the country’s Ministry of Energy, indicating that it could tighten supply even further later this year.

“The market thinks that current Saudi production levels were a hard floor, but they’re indicating output could go lower at least until inventories come down and the market stabilises,” said Christyan Malek, global head of