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KUWAIT CITY, April 3, (Agencies): The State of Kuwait will implement a voluntary cut of 128,000 barrels per day from the month of May till the end of 2023, in coordination with some OPEC and non-OPEC Participating Countries in the Declaration of Cooperation, Deputy Prime Minister and Oil Minister Bader Al-Mulla said in a press release Sunday. This voluntary cut is a precautionary measure in addition to the reduction in production agreed at the 33rd OPEC and non-OPEC Ministerial Meeting on October 5, 2022, the minister added. Kuwait’s Deputy Prime Minister and Oil Minister Dr. Bader Al-Mulla said that the voluntary reduction of production from the countries participating in the OPEC+ agreement is a proactive move to bolster the stability of oil markets amid developments in global economic conditions and their accelerating effects.
This was in Al-Mulla’s statement, which was conveyed through a statement by the Ministry of Oil, after he headed Kuwait’s delegation participating in the 48th meeting of the Joint Ministerial Monitoring Committee (JMMC), which was held Monday via videoconference. Among those developments is the rapid pace of rising global interest rates, global debt levels, the banking crisis and geopolitical developments, Al-Mulla said, noting that OPEC+ focuses on supporting the stability of oil markets. OPEC+ continues the policy of reducing production by two million barrels per day until the end of 2023, as decided at the 33rd ministerial meeting of OPEC+ on the fifth of October 2022, he mentioned.
He commended the initiative of the countries participating in the voluntary reduction under the OPEC+ agreement, which will be implemented from next May to the end of 2023. The Kuwaiti delegation participating in the meeting, in addition to Al-Mulla, included Kuwait’s Governor to OPEC Mohammad Al-Shatti, and the National Representative of Kuwait to OPEC Sheikh Abdullah Sabah Salem Al-Hamoud Al-Sabah. Russian Deputy Prime Minister Alexander Novak also said that Moscow would extend a voluntary cut of 500,000 barrels per day until the end of 2023, reports Al-Jarida daily.
The UAE, Kuwait, Iraq, Oman and Algeria said they would voluntarily cut production over the same time period. The UAE said it would reduce production by 144,000 barrels per day, and Kuwait announced a reduction of 128,000 barrels per day, while Iraq said it would reduce production by 211,000 barrels per day, and the Sultanate of Oman announced a reduction of 40,000 barrels per day.
Algeria said it would cut its production by 48,000 barrels per day. The Saudi Ministry of Energy said in a statement that the Kingdom’s voluntary reduction is a precautionary measure aimed at supporting the stability of the oil market. Meanwhile, oil prices soared nearly 6% on Monday after Saudi Arabia and other major oil producers said they will cut production by 1.15 million barrels per day from May until the end of the year. Shares in Asia were mixed.
U.S. benchmark crude oil rose $4.24 to $79.91 per barrel, or 5.6%, in electronic trading on the New York Mercantile Exchange. It rose $1.30 to $75.67 per barrel on Friday, ahead of the weekend meeting where members of the so-called OPEC+ group of oil exporting countries decided on the cuts, which are in addition to a reduction announced last October that infuriated the Biden administration. Brent crude, the pricing basis for international oils, gained $4.35 to $84.24 per barrel, or 5.4%.
The cuts in oil output immediately pushed prices higher and were expected to boost gas prices, adding to strains in many countries where high fuel prices are a heavy burden. Higher oil prices also will complicate the efforts by central banks to rein in inflation. “This will create both political waves across Europe and even higher general inflation in the USA, leading to renewed pressure on the Federal Reserve to keep hiking rates aggressively,” Clifford Bennett, chief economist at ACY Securities, said in a report.