Saudi Arabia, Russia cut oil output again, increasing the cost in global markets

Saudi Arabia and Russia, the second and third largest oil producers in the world, respectively, on Monday announced another round of oil production cuts. 

Russia Deputy Prime Minister, Alexander Novak said his country will reduce its output to global markets by 500,000 barrels a day, beginning in August, with the goal of keeping the oil market “balanced,” according to Reuters.

Saudi Arabia said it will be reducing its voluntary output by 1 million barrels per day, also citing market stability.

The cuts are an extension of their current one in place for July.

Saudi Arabia’s cuts could extend after August as well, the country also said.

The reductions will result in higher prices as importing countries compete for a small supply.

By midday Monday, Brent Crude and West Texas Intermediate oil prices had increased slightly on Monday, to $75.86 and $71.05 a barrel, respectively. 

The oil cuts amount to 5.16 million by OPEC+, or3.5% of the world’s demand, according to Reuters. 

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