Saudi Arabia will make voluntary cuts to its oil output in February and March as part of a deal to persuade most OPEC+ producers to hold production steady amid concerns that new coronavirus lockdowns will hit demand.
Two sources from OPEC+ producers said Saudi Arabia would cut output by more than 400,000 barrels per day (bpd) in the next two months on top of its existing cuts.
Two producers - Russia and Kazakhstan - will be allowed to bump up their output by a combined 75,000 bpd in February and a further 75,000 bpd in March, Kazakhstan’s energy minister said.
The rest of OPEC+ will hold output steady, meaning the group’s overall cuts would amount to around 7.05 million bpd by March, a draft OPEC+ statement seen by Reuters should, excluding the planned voluntary additional cuts from Saudi Arabia.
The unusually complicated deal by OPEC+, which combines OPEC producers and others including Russia, follows debate that forced a second day of negotiations.
Russia and Kazakhstan had pushed for the group to raise production by 500,000 barrels per day (bpd) while others wanted no increase.
An internal OPEC+ document dated Jan. 4 seen by Reuters highlighted bearish risks and stressed that “the reimplementation of COVID-19 containment measures across continents, including full lockdowns, are dampening the oil demand rebound in 2021.”
Saudi Energy Minister Prince Abdulaziz bin Salman on Monday urged caution, noting still fragile fuel demand and the unpredictable impact of new variants of the coronavirus.
