In the vast oil map, core OPEC+ oil producers such as Saudi Arabia and Russia are like wise captains, controlling the course of global oil prices. Recently, they decided to adjust their strategy again and extend the voluntary reduction in production until the end of the second quarter of this year.
Saudi oil giant Aramco, which had planned to increase its production capacity to 13 million barrels per day, has suspended the plan. Saudi Energy Minister Prince Abdul bin Salman revealed that this is because they see the dawn of the green transition and are starting to think about how to move forward on the path of sustainable development.
At the same time, Russia announced that it would cut production and exports by 47 by the end of June10,000 barrels per day. Despite the uncertainty and risks in the global oil market, these oil producers have firmly chosen to cut production to stabilize oil prices.
However, facing the challenges of the market is not an easy task. The growth in global oil demand is mainly driven by industrial demand in developing countries, while the recovery in transportation demand and the risk of recession in advanced economies such as Europe are also uncertain. Despite efforts by oil producers to adjust production, changes in the market can still have a profound impact on them.
Geopolitical factors also have an important impact on the trend of oil prices. Although the Israeli-Palestinian conflict and the Red Sea crisis have weakened the drivers of oil prices**, they have been supportive of rising transportation costs and widening regional spreads. This means that oil producers still need to consider geopolitical factors when influencing oil prices.
In this uncertain and challenging market, the decisions of oil producers such as Saudi Arabia and Russia to cut production have brought new variables to the global oil market. However, these captains will hold the rudder firmly and steer the course of oil prices. We'll see if they'll lead us in a new direction.