- Saudi Arabia announced the plan to cut oil production by 1 Mn bl/d in July 2023. No OPEC+ member follows the voluntary cut but the oil cartel looks set to reduce production quota by 3.34% in 2024.
- Saudi Arabia’s production cut appears to have a limited impact on oil prices, given the declining global demand for oil prices. However, the further decline in oil supply may complicate the US government’s effort to replenish the SPR.
- The dwindling SPR amidst the decline in the outlook for oil supply may results in another bout of energy inflation, exposing the US economy to a stagflation scenario.
