Major oil producers led by Saudi Arabia have announced a surprise production cut of more than one million barrels per day calling it a "precautionary" move aimed at stabilising the market, despite US calls for production increase to curb inflation.
The new production cuts by Saudi Arabia, Iraq, the UAE, Kuwait, Algeria and Oman from May to the end of the year will be the biggest reduction since OPEC and its partners slashed two million barrels per day in October.
Russia, a leading member of the OPEC+ group of producers said it was also extending an existing cut of 500,000 bpd to the end of this year, describing it as "a responsible and preventive action".
Oil prices soared almost six percent in Asian trade on Monday morning with West Texas Intermediate jumping by 5.74 percent to $80.01 a barrel and Brent climbing 5.67 percent to $84.42.
A Saudi energy ministry official said the latest move ''is a precautionary measure aimed at supporting the stability of the oil market", the official Saudi Press Agency said.
The cuts follow a drop in oil prices triggered by jitters over the banking sector, following the collapse of US lender SVB and UBS's hurried buy-out of troubled rival Credit Suisse, UAE-based oil expert Ibrahim al-Ghitani told AFP news agency.
