Saudi to cut oil output by another 1m barrels a day

Saudi Arabia said Monday it had asked oil giant Aramco to cut an additional one million barrels per day from June, to support prices that have crashed during the coronavirus crisis.

The move will reduce the production of the world's biggest crude exporter to 7.5 million barrels per day, the energy ministry said in a statement cited by the official Saudi Press Agency. OPEC and its allies in the so-called OPEC+ grouping agreed last month to cut production by a record 9.7 million bpd while other producers pledged to reduce their output by around 3.7 million bpd.

Under the deal, Saudi Arabia's daily production was cut to 8.5 million bpd, the lowest in more than a decade. "The kingdom aims from this additional cut to stimulate countries in the OPEC+ and other producing nations to comply with committed production cuts and make additional reductions in a bid to support the stability of the global oil market," the energy ministry said.

Despite the massive cuts, which became effective on May 1, oil prices remain extremely low -- losing around two-thirds of their value this year due to a coronavirus-driven slump in demand. Prices were further dampened in April by a price war between Russia and Saudi Arabia during which Riyadh's production soared to a record 12.3 million bpd, pushing stockpiles to unsustainably high levels.

The ministry said that with the latest production curb, the kingdom would have cut 4.8 million bpd from the record output levels in April. The price of the international benchmark Brent crude is hovering around $30 a barrel.