Saudi Arabia to cut oil production by 1 million barrels per day

According to the Associated Press on June 4th, Saudi Arabia announced a daily reduction of 1 million barrels of oil production to support oil prices. Analysis shows that this move will lead to an increase in domestic oil prices in the United States, which is not conducive to the current anti inflation measures in the U.S.

Saudi Energy Minister Abdulaziz bin Salman stated that Saudi Arabia will reduce production by 1 million barrels of oil per day starting from July. Salman stated that this oil production reduction may be extended, and OPEC+will make every effort to bring stability to the market. According to the report, other OPEC+oil producing countries also agreed to extend the earlier oil production reduction measures until next year at a meeting held in Vienna.

 Jorge Leon, Senior Vice President of Oil Market Research at Rystad Energy, said that the production reduction may push up oil prices in the short term, and the subsequent impact will depend on whether Saudi Arabia decides to extend the production reduction. Industry analysis shows that high oil prices can fuel inflation, meaning that American drivers will spend more on gasoline and encourage the Federal Reserve to further raise interest rates, thereby slowing down US economic growth.