OPEC+ Decision On Production Cuts May Cause Global Surge In Oil Prices - Japanese Cabinet

TOKYO (UrduPoint News / Sputnik - 05th June, 2023) OPEC+ decision to extend oil production cuts until the end of 2024 may cause an increase in global oil prices due to the possible imbalance of supply and demand, Japanese Chief Cabinet Secretary Hirokazu Matsuno said on Monday.

"We know that the OPEC+ meeting (on June 4) has decided to extend oil production cuts until the end of 2024. In early April, a number of countries have already announced production cuts. Moreover, Saudi Arabia has decided to reduce oil production by 1 million (barrels per day) starting July. Thus, the imbalance of supply and demand, as well as opacity are rising, which may result in oil prices remaining at a high level," Matsuno said.

The Japanese government is closely monitoring the developments on the global energy market and their impact on the Japanese economy, including price surges, he added.

Saudi Arabia, Russia and several other oil producers from the 10-nation OPEC and its non-member partners announced in April that they would voluntarily take a total 1.16 million barrels of crude oil per day off the market from May-December 2023 in a bid to prop up prices.

OPEC+ agreed at the meeting on Sunday to adjust their cumulative production to 40.46 million barrels per day over January-December 2024. Russia said it would extend its voluntary production cut of 500,000 barrels per day until the end of 2024, while Saudi Arabia said it would make an extra 1 million cut to its daily production from July, on top of a 500,000 cut that was likewise extended through December 2024.