Saudi Arabia and Russia limit oil production and exports, trying to raise world prices

Saudi Arabia has decided to extend its unilateral 1 million barrels per day oil production cut for another month, until August. At the same time, Russia announced a reduction in oil exports by 500,000 barrels per day, reports Bloomberg.

The two countries hope that their decisions will lead to higher oil prices on the world market, according to the agency. As of mid-day, June 3, the price of Brent crude oil rose by 1.3% to $76.39 per barrel.

In recent weeks, the price of Brent has been hovering around $75 per barrel due to weak demand for oil in China.

At the beginning of the year, it was expected that oil would rise steadily throughout 2023. However, the price of oil has been falling due to the slower pace of economic recovery in China after the lifting of COVID restrictions and central banks' policy of raising interest rates.

Oil supply is still expected to decline in the second half of the year, but this will not lead to sharp price spikes. Goldman Sachs and Morgan Stanley have already abandoned their forecasts of an oil price return to $100 per barrel by the end of the year.

The OPEC+ countries continue to be pressured by major oil consumers, including the United States, to increase production.

On May 29, 2023, the United States' averting a default on its debt obligations caused oil prices to increase.

On June 12, Pakistan started buying Russian oil for the first time in its history.

On July 3, Bloomberg wrote that India has been increasing oil imports from Russia for the tenth month in a row.