Two of the best oil producing nations of the Organization of Petroleum Exporting Countries has recently agreed to strengthen their resolve in production cuts to uphold a balance in the global crude marketplaces. This was announced this Thursday, after a assembly amongst the oil ministers in the Red Sea city of Jeddah.
However, recent figures for the month of July have shown that at least 14 members from the organization increased their production levels in the said month, which counts Saudi Arabia as one of the most determined country out of the said figures.
The energy minister of Saudi Arabia, Khalid al Falih and Iraq’s Oil Minister Jabbar al Luaybi told reports that the two have avowed to harmonize their oil policies, states the sources.
The two countries are heavily dependent on oil and recently, they have been experiencing an economic distress due to its declining value. Crude is now selling at $50 per barrel which is half the price if to compare from what it was two years ago.
According to OPEC, the output for the previous month reached 32.87 million barrels a day, which is an increase from June’s data of 32.69 million.
The said data exceeded the settled perimeter of just 32.5 million barrels a day last November and was beyond the expected international demand of just 32.4 million.
The alignment between Saudi Arabia and Iraq is believed to be a momentous sign as Saudi Arabia exerts its efforts to really push this alignment with the Iraqi government ahead of its contending country of Iran.
Furthermore, Saudi Arabia’s Crown Prince Mohammed bin Salman also held a meeting in Jeddah with Iraq’s al-Luaibi and deliberated the coordination of the oil guidelines and the two nations’ assurance to their promised cuts in anticipation of the worldwide markets formation of an upright stability, the sources added.
“The possibility of continued production cuts is on the table, and the door to extension of reduction has not been closed. If further actions are needed by the market, whether to extend or change production levels, they will be examined on time and agreed through 24 countries.” Al-Falih told reports.
“The process of investment in the oil sector in Saudi Arabia will not be affected at all by this temporary agreement; the Kingdom’s production capacity is maintained at 12 million barrels and we are investing to preserve this capacity.” He added.