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The world’s biggest oil exporters, Saudi Arabia, and Russia announced deeper cuts in oil supply to raise oil prices. The cuts were implemented despite concerns over a possible global economic slowdown and further interest rate increases from the U.S. Federal Reserve.

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OPEC+ is a group of countries that export petroleum, including Russia, that have been reducing their output since November 2022 in order to raise the price of oil. This decision was made due to lower demand from China and increased supply from the United States. However, these cuts have yet to push prices above the range of $70-$80 per barrel.

Currently, Saudi Arabia plans to extend its voluntary oil output cut of one million barrels per day for another month to include August, and the cut could be extended beyond that month.

Russia is following suit by cutting its oil exports by 500,000 barrels per day in August. In addition to Algeria's decision to cut oil output by an extra 20,000 barrels in August, these cuts amount to 1.5% of the global supply. This brings the total cuts pledged by OPEC+ to 5.16 million bpd.

Libya's oil minister has expressed support for Saudi Arabia's decision, stating that it will positively impact the market balance between global producers, consumers, and the global economy.

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OPEC+ has already cut production by 3.66 million barrels per day, which is equivalent to 3.6% of global demand. This includes 2 million barrels per day that were agreed upon last year, as well as voluntary cuts of 1.66 million barrels per day that were agreed upon in April and extended until December 2024. OPEC+ is responsible for producing around 40% of the world's crude oil.

According to Procurement Resource, the prices of oil are expected to rise due to an increase in oil cuts. The major producing countries have agreed to deepen the cut, including OPEC and Russia, who supply 40 percent of the world's crude oil. The total cut amount is estimated to be 5.16 million bpd, and it is expected to continue until December 2024.