Oil prices have reportedly soared almost six per cent in Asian trade this morning after a major oil production cut announcement by Saudi Arabia and other OPEC+ oil producers. On Sunday, all these producers announced voluntary cuts to their production from May, with Riyadh saying that it would cut oil production by 500,000 barrels per day.
According to a report in AFP, as of Monday morning, the West Texas Intermediate contract jumped 5.74 per cent to $80.01 a barrel and Brent jumped 5.67 per cent to $84.42.
It must be noted that the oil production cut by Saudi Arabia and other OPEC+ oil producers would come into effect from May and last until the end of the year. Even before this, the OPEC+ cartel slashed the oil production by two million barrels per day in October but the current cut is considered to be the biggest since the last one.
Advertisement
When it comes to OPEC+, the United Arab Emirates (UAE), Kuwait, Iraq, Oman etc., - all have announced voluntary cut in oil production. Even Russia’s deputy prime minister said that Moscow would extend a voluntary cut in oil production of 500,000 barrels per day for the same time period.
As central banks across the world try to get a grip over inflation, the voluntary cuts in oil production by OPEC+ nations are expected to make things rather tricky for everyone. As per experts, the move is also expected to put more pressure on central banks to hike interest rates even more.
Just one email a week