Voluntary production cuts in oil by OPEC and its allies may impact the prices of crude oil and even impact the demand, RIL mentioned in a media call.
From July 2023, an additional production cut of about 1 barrel per day has been implemented by Saudi Arabia. Even this May, OPEC cut oil production by 1.6 million bpd for this year.
As per May cuts from Saudi Arabia, supply was reduced by 500,000 bpd while Iraq had cut supply by 2,00,000 bpd till the year’s end. Russia which is considered as part of OPEC too announced an extension of the product cut of 50,000 bpd till the year’s end.
V Srikanth who is the chief financial officer of RIL said that going ahead high inflation and subdued global demand and an increased supply from China may impact the company’s downstream exports to US and Europe.
He also said that from a risk factor point of view, these production cuts by Countries that are a part of OPEC may keep the crude prices elevated and even impact demand. While some other factors that could affect the demand may be higher inflation, higher supply from China, etc.
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