Saudi Arabia and Russia are extending cuts to the amount of oil they pump to the world in a bid to prop up prices, showing how two of the world’s largest oil producers are scrambling to boost income from the fossil fuel even as demand has weakened with the economy.
The decision gave a slight boost to oil prices Monday and comes after the Saudis announced a large cut in output for July at the latest meeting of the OPEC+ coalition of oil producers — raising concerns that gasoline prices for U.S. drivers could start ticking up.
The Saudi Energy Ministry said it would extend July’s cut of 1 million barrels per day through August to support “the stability and balance of oil markets.” That will keep the Gulf nation’s output at 9 million barrels per day.
Meanwhile, Russian Deputy Prime Minister Alexander Novak said his country will cut production by an additional 500,000 barrels a day in August, according to Russian news reports.
The voluntary reductions come on top of earlier cuts that the OPEC oil cartel, led by Saudi Arabia, and allied producers, led by Russia, agreed to extend through next year.