Saudi Arabia together with other members of OPEC, the umbrella organization for oil-exporting countries, announced cuts to the supply of oil, which is expected to hurt the US, among other countries.
The reason for the cuts is the desire to raise oil prices amid fears of a drop in demand.
As part of the step that was declared after an official OPEC meeting, the output will be cut by a total of 1.16 million barrels per day. The drop in production is expected to begin next month and will continue until the end of the year.
US unhappy about production cuts
This isn't the first time Saudi Arabia cut the production of barrels per day, after it announced a drop to two million barrels per day last November. The US condemned this step at the time.
John Kirby, US National Security Council speaker, addressed the Saudi decision in a press conference, admitting that the decision to cut production had surprised the Americans.
Even so, Kirby stressed that the US was informed about the move ahead of time.
In addition to Saudi Arabia, production was cut by Iraq, the UAE, Kuwait, Oman, Algeria and Russia, which in the past has reacted with production cuts to the imposition of price ceilings on its oil exports.
For the OPEC organization, this is a necessary step in order to stabilize the oil market, after last month the price per barrel fell to around 70 dollars, the lowest it has been in 15 months.