Saudi Arabia said on Monday it would add to existing oil output cuts by reducing production by another 1 million bpd next month — equivalent to 1% of global oil supply.
The cut would slash its total production to 7.5 million bpd, down nearly 40% from April.
The slump in oil prices has caused significant pain to the kingdom’s budget.
It has tripled the VAT from 5% to 15% and also cancelled salary bonuses to plug deficit holes.
On Monday, the kingdom'[s cabinet urged OPEC+ countries to further reduce oil production rates to restore balance in global crude markets, state news agency (SPA) reported early on Wednesday.
“The cabinet affirmed the Kingdom of Saudi Arabia’s endeavour to support the stability of global oil markets,” according to a statement.
“The Kingdom of Saudi Arabia’s initiatives aim at urging the countries participating in the OPEC+ agreement and other producing countries to adhere to the cut rates and to provide more reduction in production in order to contribute to restoring the desired balance of the global oil markets.”
OPEC and its allies, a group known as OPEC+, decided in April to cut output by 9.7 million barrels per day (bpd) for May and June, in response to the 30% drop in global fuel demand caused by the coronavirus pandemic.
It was a record reduction.