Analysis by Energy Workforce President Tim Tarpley
Saudi Arabia on Tuesday extended its one million barrel per day voluntary crude oil production cut until the end of the year. The reduction will put Saudi crude output near nine million barrels per day in the next three months. The one million barrel per day cut was first enacted in July and has been extended on a rolling basis. The cut adds to 1.66 million barrels per day of other voluntary cuts in production that other members of OPEC have put in place until the end of 2024.
Russia, who is in many instances selling its oil at a discount to remain under a cap, has pledged to voluntarily reduce exports by 500,000 barrels per day in August and by 300,000 barrels per day in September. However, most Russian oil is actually selling on the market above that cap. Oil prices went above $90 on Tuesday, the highest we have seen since November of last year. Many oilfield stocks also saw gains.
Uncertainty regarding demand coming out of China is one of the reasons for the cuts, as that country continues to struggle with its own recovery from COVID-19 and tariffs on trade enacted by many Western countries. Meanwhile, the Russia-Ukraine war shows no signs of coming to a close anytime soon, with the Ukrainians unable to make significant gains with their counteroffensive and winter in central Europe coming on quickly. The markets are beginning to bake in the prospects of an extended conflict in the region.
Comment Deadline Extended for Dunes Sagebrush Lizard Listing
In July, U.S. Fish and Wildlife Service proposed to list the Dunes Sagebrush Lizard as an endangered species, potentially curtailing certain oil and gas activities in the Permian region as well as sand mining to support well stimulation. Energy Workforce & Technology Council joined a number of other energy trade associations in asking for an extension on the public comment period. While we had requested a 90-day extension, ultimately only a 30-day extension was granted. Should you or your company have any interest in preparing comments, contact Senior Director Government Affairs Deidre Kohlrus.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
