Saudi Arabia shocked onlookers at this week’s Opec+ ministerial meeting by announcing a unilateral 1mn b/d additional production cut for February and March. The “New Year present” could help hasten the drawdown of inventories and hedge against any potential near-term demand hits, but it risks benefiting rival producers and could weaken Opec+ discipline.
The move was announced by Minister of Energy Prince Abdulaziz bin Salman at a press conference following the 5 January conclusion of ministerial talks, during which production allocations were frozen till end-March for all countries except for Russia and Kazakhstan, which secured small increases. Prince Abdulaziz denied that the voluntary cut was part of a compromise to enable Russia and Kazakhstan to increase production. (CONTINUED - 1566 WORDS)