While the large reduction comes on the back of some of the kingdom’s biggest price increases in years, the move was still bigger than expected in a survey of traders and refiners. It follows an OPEC+ output increase that delegates privately said was intended to instill better discipline among members like Kazakhstan and Iraq.
OPEC+ announced on April 3 that it would add more than 400,000 barrels a day back into the global market next month.
The shock move deepened a rout in oil prices, which tumbled more than 10% last week after trade tariffs announced by US President Donald Trump threatened the global economy.
The extra output from May will come on top of an increase from the Organization of the Petroleum Exporting Countries this month, as it begins to unwind some of its production curbs imposed in 2022. It also plans further small increments in coming months.
Accelerating supply at a time of concerns over demand came as a surprise for many marketwatchers, given Saudi Arabia needs crude at above $90 a barrel to balance its spending. Oil in London dropped below $65 on Friday, the lowest in four years.Trump has pressed OPEC+ “to cut the price of oil,” which he says is needed to reduce inflation and heighten pressure on Russia to help end the war in Ukraine. The Kingdom also reduced prices to the US and Europe, though the reduction was much smaller than for Asian buyers. European prices fell 50 cents for all grade, wihle those to the US were cut by 20 cents.
