Saudi Arabia boosted its oil output to over 11 million barrels per day last month, the OPEC+ member announced. By doing so, the kingdom is fulfilling its promise to stabilize world markets.
In the first increase in two years, Saudi Arabia took the decision to increase its output after the OPEC+ group decided to accelerate the return of halted supplies amid exhortations from the US and other key consumers as a means of extinguishing the rampant spike in fuel costs. The last time that the Saudis’ oil output exceeded 11 million barrels per day came in April 2020, when the kingdom increased its output to 12 million barrels per day while engaged in a price war with Russia.
While brent crude futures cost $120 per barrel in early June amid Russia’s invasion of Ukraine and the fears of supply disruption that followed, the price has declined to $95.
OPEC+ warned in its monthly report, however, that the current price of oil futures does not reflect the current realities of supply and demand, stating that “The market is in a state of schizophrenia, and this is creating a type of yo-yo market and sending erroneous signals.”