Saudi Arabia will extend its voluntary oil production cut of 1 million barrels per day into September, the state-owned Saudi Press Agency (SPA) said on Thursday. This is the third month in a row that the kingdom has implemented the cut.
The SPA said that the cut will reduce Saudi Arabia's production to approximately 9 million barrels per day in September. The cut can be extended or deepened, the SPA said.
The decision to extend the cut comes as global oil prices have been under pressure in recent months. The price of Brent crude oil, the international benchmark, is currently trading around $105 per barrel.
The cut is likely to support oil prices in the short term. However, it could also lead to higher gasoline prices for consumers in the United States and other countries.
Background
Saudi Arabia is the world's largest oil exporter. The kingdom's decision to cut production is a significant move that could have a ripple effect on global oil markets.
The cut is part of Saudi Arabia's efforts to support oil prices. The kingdom has been under pressure from the United States and other countries to increase production in order to lower prices. However, Saudi Arabia has resisted these calls, arguing that it needs to protect its market share.
Impact
The extension of the oil production cut is likely to support oil prices in the short term. However, it could also lead to higher gasoline prices for consumers in the United States and other countries.
The cut could also have a negative impact on the global economy. Higher oil prices could lead to slower economic growth and higher inflation.
Conclusion
Saudi Arabia's decision to extend the oil production cut is a significant move that could have a ripple effect on global oil markets and the global economy. The cut is likely to support oil prices in the short term, but it could also lead to higher gasoline prices and slower economic growth.