Saudi Arabia and Russia benefited from oil production cuts – Kommersant
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Saudi Arabia and Russia have earned billions of dollars in extra oil revenue in recent months after their OPEC+ decision to cut oil production sent oil prices soaring. Writes about this The Wall Street Journal (WSJ).
As the publication notes, after the decision of Russia and Saudi Arabia, Brent oil rose in price to $100 per barrel. According to calculations by the consulting company Energy Aspects, rising prices will more than compensate for the reduction in sales volumes.
Energy Aspects forecast Saudi Arabia’s oil revenues will rise by nearly $30 million a day this quarter compared with last quarter, or about 5.7%. Over three months, that’s about $2.6 billion. Russia’s oil revenues are likely to increase by about $2.8 billion.
Brent crude has risen 25% this quarter and has traded at $95 a barrel in recent days, although the price has fallen slightly recently.
OPEC+ experts predict a global oil deficit of 3.3 million barrels per day in the fourth quarter. Many oil analysts now expect the benchmark Brent price to soon exceed $100 a barrel.
Rystad Energy estimates that oil production costs in Saudi Arabia and Russia are low. They averaged $9.3 and $12.8 per barrel, respectively, last year. Low costs mean that most of the oil export revenues can be converted into profits.
Last October, OPEC decided to cut production by 2 million barrels per day. In May, a small group of countries led by Saudi Arabia announced renewed production cuts of more than 1 million barrels per day. In July, Saudi Arabia cut production again, again by 1 million barrels per day. On September 5, Saudi Arabia and Russia said they planned to extend existing cuts until the end of 2023.
According to the latest forecast According to the International Energy Agency (IEA), restrictions on oil production by OPEC+ countries will lead to a significant shortage of oil on the world market in the second half of 2023.
How reduced oil production is not keeping pace with growing demand – read the material “IEA records underfilling”.
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