SAUDI Arabia and other oil producing countries have announced their plans to cut oil production in a bid to stabilize the falling prices of the commodity. KSA said on Sunday it will voluntarily reduce its oil production by 500,000 barrels per day from May until the end of 2023 in coordination with other members of the oil producers’ alliance. Russia’s Deputy Prime Minister also said Moscow would extend a voluntary cut of 500,000 bpd until the end of 2023. The UAE, Kuwait, Iraq, Oman and Algeria said they would voluntarily cut output over the same period.
According to industry sources, the move of OPEC might lift the global price of oil by at least $10 a barrel. The organization is doing so to support the stability of the oil market but an aggregate cut in oil output by over one million barrels a day would mean much for the world economy as it would badly affect the overall price stability, especially in countries like Pakistan, where oil price is already all-time high. In the new scenario, people are pinning hopes on the import of Russian oil at a discounted price. The Government deserves credit for translating the dream of oil imports from Russia into reality as Minister of State for Petroleum Musadik Malik has said that the government will place its first order for Russian crude next month and it would take about four weeks for the commodity to reach Pakistan. He also clarified that Russia had assured the government that it was giving Pakistan a discount as much as any other neighbouring country was receiving. However, whether or not the imports from Russia would meaningfully benefit the end consumer depends on the actual price and the quantum of imports.
