Oil prices rose sharply after OPEC + announced sudden production cuts, and US oil futures contracts jumped by more than $6 to $81.69 a barrel, and Brent crude futures jumped more than $6 to record $86.44 a barrel.
On Sunday, April 2, Saudi Arabia and other oil producers in the OPEC + group announced voluntary cuts in their crude production, by more than 1.5 million barrels per day, until the end of 2023.
Riyadh said it would cut production by 500,000 barrels per day from May until the end of 2023, state media reported.
Russian Deputy Prime Minister Alexander Novak also said Moscow would extend a voluntary cut of 500,000 bpd until the end of 2023.
The UAE, Kuwait, Iraq, Oman and Algeria said they would voluntarily reduce production over the same period.
The UAE said it would reduce production by 144,000 barrels per day, and Kuwait announced a reduction of 128,000 barrels per day, while Iraq said it would reduce production by 211,000 barrels per day, and the Sultanate of Oman announced a reduction of 40,000 barrels per day.
Algeria said it would cut its production by 48,000 barrels per day.
The Saudi Ministry of Energy said, in a statement, that the Kingdom’s voluntary reduction is a precautionary measure aimed at supporting the stability of the oil market.
Sunday’s decisions take the total volume of cuts from the Organization of the Petroleum Exporting Countries (OPEC), Russia and other allies to 3.66 million bpd, according to Reuter’s calculations, or 3.7% of global demand.
Oil prices fell last month towards $70 a barrel, the lowest level in 15 months, amid fears that demand would be affected by a global banking crisis. However, no further measures were expected before OPEC + to support the market after sources reduced this possibility and crude oil recovered around $80.