DUBAI, United Arab Emirates (AP) — Saudi Arabia said Tuesday it will extend its voluntary production cut of 1 million barrels of oil a day through the end of the year.
The announcement, carried by the state-run Saudi Press Agency, comes as the kingdom has been unilaterally cutting its output to try and boost sluggish crude oil prices.
The announcement said Saudi Arabia still will monitor the market and could take further action if necessary.
“This additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets,” the Saudi Press Agency report said, citing an unnamed Energy Ministry official.
Benchmark Brent crude traded Tuesday at $90 a barrel immediately after the announcement. Brent had largely hovered between $75 and $85 a barrel since last October.
The Saudi reduction, which began in July, comes as the other OPEC+ producers have agreed to extend earlier production cuts through next year.
A series of production cuts over the past year has failed to substantially boost prices amid weakened demand from China and tighter monetary policy aimed at combating inflation.
The Saudis are particularly keen to boost oil prices in order to fund Vision 2030, an ambitious plan to overhaul the kingdom’s economy, reduce its dependence on oil and to create jobs for a young population.
The plan includes several massive infrastructure projects, including the construction of a futuristic $500 billion city called Neom.
Higher prices would also help Russian President Vladimir Putin fund his war on Ukraine. Western countries have used a price cap to try to cut into Moscow’s revenues.
Western sanctions mean Moscow is forced to sell its oil at a discount to countries like China and India.