Saudi Arabia to cut oil production – but what will it mean for the UK drivers?
On Monday 5th June 2023, the world’s largest exporter of oil, Saudi Arabia, revealed that they would be cutting production by more than 1 million barrels per day.
The middle eastern country’s energy ministry stated that the Kingdom's output would drop to nine million barrels per day in July.
This is a fall from more than 10 million barrels per day that were recorded in May this year.
RAC fuel spokesperson Simon Williams said: “While oil production cuts are intended to push up the barrel price which usually means bad news for drivers at the pumps there’s currently no cause for panic.
“Diesel is still seriously overpriced due to its lower wholesale price which hasn’t been fully passed on by the biggest retailers despite a record 12p a litre fall in May so should continue to come down. And the price of petrol is also slightly too high and should fall by a couple of pence in the next week or so.
“Pump prices are now back to what they were in October 2021 with unleaded at 143.26p which means it’s very close to dropping below the previous long-term record high of 142.48p set in April 2012, but of course the Government’s 5p a litre duty discount is a big part of this. Diesel is already below its former all-time high of 147.93p from the same time.
“Oil producer group OPEC+ has taken well over 3m barrels a day out of circulation so far this year, but due to the economic downturn forecourt prices have continued to fall. For that reason, we remain hopeful this won’t affect drivers for some time.”
What do you make of the announcement? Leave your comments below.
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