DUBAI, United Arab Emirates (AP) — Saudi Arabia announced on Tuesday that it will extend its voluntary production cut by 1 million barrels a day of oil through the end of the year.
The announcement, circulated by the Saudi state press agency, comes as the kingdom has unilaterally cut production to boost sluggish crude oil prices.
The announcement said Saudi Arabia would continue to monitor the market and take further action as needed.
“This additional voluntary cut is intended to increase precautionary efforts by OPEC+ countries to support stability and balance in oil markets,” the Saudi Press Agency report said, citing an unnamed Energy Ministry official.
Benchmark Brent crude traded at $90 a barrel on Tuesday immediately after the announcement. Brent has largely fluctuated between $75 and $85 a barrel since October of last year.
The Saudi reduction, which began in July, comes as the other OPEC+ producers agreed extend previous production cuts until next year.
A series of production cuts over the past year The country has failed to boost prices significantly due to weaker demand from China and tighter monetary policy to combat inflation.
The Saudis are particularly keen to raise oil prices to fund Vision 2030, an ambitious plan to revitalize the kingdom’s economy, reduce its dependence on oil and create jobs for a young population.
The plan includes several massive infrastructure projects, including building a futuristic $500 billion city called Neom.
Higher prices would also help Russian President Vladimir Putin with funding war against Ukraine. Western countries have tried to limit Moscow’s revenues with a price cap.
Western sanctions mean Moscow is forced to sell its oil at a discount in countries like China and India.