Crude prices dropped sharply last month, driven by the turmoil in the banking sector. That hurt the budgets of countries like Saudi Arabia, which rely on oil revenue. And cutting production was a reliable way to bring prices back up.
April 3, 20236:30 PM ET
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Brent prices, the global benchmark, jumped up around $5 to around $85 a barrel immediately on news of the cuts. Reducing oil production means less supply on the market, which obviously pushes prices higher.
Because the cuts are planned to last from May through the end of the year, the effect on oil prices is also expected to be prolonged.
