PoliticsBusinessSaudi ArabiaSaudi Arabia governmentUnited StatesUnited States government Surprise Production Cuts by Saudi Arabia and Other Oil Giants: Impact on the Oil Market by Gabriel Martinez April 2, 2023 written by Gabriel Martinez April 2, 2023 0 comments Bookmark 58 Saudi Arabia and other OPEC countries recently agreed to reduce their oil production until the end of 2020. This could lead to an increase in prices worldwide. If this happens, it will mean more expensive gas for everyone, especially people from the USA where inflation has been caused by the conflict between Russia and Ukraine. Saudi Arabia recently announced that it would reduce its production of oil by 500,000 barrels per day. This move is likely to cause issues with the US and other countries who needed Saudi Arabia to produce more oil since they wanted prices to go down and limit Russia’s financial growth. The reduction was made in collaboration with other OPEC and non-OPEC members, which was also different from their previous October announcement, making the Biden administration unhappy. The government planned to keep oil prices stable by reducing the amount of oil produced in 2022. This is a small cut of less than 5% from the average production, which is 11.5 million barrels a day. Iraq has to reduce their daily production by 211,000 barrels, UAE by 144,000 barrels, Kuwait 128,000 barrels, Kazakhstan 78,000 barrels, Algeria 48,000 and Oman 40,000 barrels per day. All these decisions were made public through the state media channels. Two million barrels of oil were removed right before the United States’ midterm elections, which meant that the prices for things like fuel were going up. The President, Joe Biden, said that there would be “consequences” because of this and Democratic leaders suggested closing off cooperation with Saudi Arabia. Both U.S. and Saudi Arabian people said that their goal was solely to keep the market price low. Since certain limits have been set, the price of oil has gone down. The worldwide average cost for a barrel (which is a unit used to measure oil) was around $80 at the end of last week. This figure is lower than back in October when it was around $95 per barrel. Kristian Coates Ulrichsen, an expert at Rice University’s Baker Institute for Public Policy, mentioned that the Saudis have a goal to keep the price of oil high. This is to finance a bunch of large projects connected to Crown Prince Mohammed bin Salman’s Vision 2030 plan which aims to change the economic structure. “Decisions in Saudi Arabia are mostly based on their own self interest and not necessarily what other countries might want them to do. This could cause some disagreements between the US and Saudi Arabia in the future, even without thinking about any impacts from Russia,” he said. Aramco, a company owned by Saudi Arabia, made $161 billion in 2021 – that’s 46.5% more money than the year before! In the next six years, they are hoping to increase their production from what it is now to 13 million barrels of oil per day. The long-time friendship between the U.S. and Saudi Arabia has been shaky lately due to the murder of a journalist living in the U.S., Jamal Khashoggi, as well as Saudi Arabia’s unsuccessful war with Yemen, which is backed by Iran. Before he became president, Biden had promised to punish Saudi Arabia for the murder of journalist Jamal Khashoggi. But after becoming president, he changed his mind when gas prices went up. He even traveled to the kingdom last year to try and make peace with its leaders, shaking hands and fist bumping Crown Prince Mohammed bin Salman – but this made some people angry. Saudi Arabia said they don’t agree with Russia in the Ukraine war, even though it has gotten closer to both Moscow and Beijing lately. This worries people in Washington that are Saudi Arabia’s long-time friends. Recently, Aramco made a lot of money available to put into China’s petrochemicals business. You Might Be Interested In The US sets a grim milestone with a new record for the deadliest six months of mass killings Local Malaria Transmission Detected in Texas and Florida for the First Time in Two Decades, CDC Reports Musk and Zuckerberg Ready for an Epic Showdown: Cage Match Antics McConnell Completes Therapy, Leaves Rehab Facility After Concussion Treatment Biden goes into 2024 with the economy getting stronger, but voters feel horrible about it High-Level US-Mexico Discussions on Rising Migrant Flow at Border BusinessPoliticsSaudi ArabiaSaudi Arabia governmentUnited StatesUnited States government Share 0 FacebookTwitterPinterestEmail Gabriel Martinez Follow Author Gabriel Martinez is a science and technology journalist who covers the latest news and developments in the world of science. 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