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Saudi Arabia Commodities April 2024

Saudi Arabia: Saudi crude output still downcast in April; Brent prices rise

Brent crude oil prices averaged USD 88.97 per barrel in April, up 4.7% from March. On 30 April, the commodity traded at USD 87.91 per barrel, up 0.6% from 29 March. Rising tensions between Iran and Israel pushed up prices.

Turning to production, Saudi oil output was stable at March’s 9.03 mbpd (million barrels per day) in April, remaining at one of the lowest levels in the past decade.

Saudi crude output dropped 8.6% in 2023, and is set to decline further in 2024, albeit at a lower speed. This is the result of the various production cuts agreed with OPEC+ since late 2022.

In recent news, on 2 June, OPEC+ extended voluntary production cuts—in place since January—to the end of September from the end of June, with a gradual unwinding to take place over the following 12 months. The move was largely expected by the market and will depress Saudi oil output this year.

Looking further ahead, oil production is set to recover to near next year as output cuts are rolled back. That said, the recovery is now likelier to be less robust than initially anticipated by the market. On 2 June, OPEC+, as well as extending voluntary cuts to the end of September, also extended an earlier agreement to cap oil output at 39 mbpd until end-2025 from end-2024.

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