Saudi Arabia's GDP shrank 3.3% in the first quarter due to lower oil production from a year-earlier period, as the biggest Arab economy suffers from adherence to OPEC+ cuts.
Oil GDP decreased 12% in the first quarter, compared with a 4.7% contraction in the corresponding quarter last year, the General Authority for Statistics said May 10.
The first quarter economic slowdown was lower than the 3.9% contraction recorded in the fourth quarter of 2020, when the oil GDP shrank 8.6%, data showed.
Saudi Arabia has been curbing its production since May 2020, when the OPEC+ alliance started the steepest cuts in its history by trimming output by about 10 million b/d.
Easing OPEC+ cuts
OPEC+ is currently in the midst of easing its cuts by adding 2 million b/d by July amid an improvement in oil demand outlook.
The increment will largely come from Saudi Arabia, which is betting that improvements in the global economy will outweigh the surge of coronavirus cases in India, Brazil, and Japan.
The 23-country alliance, which controls roughly half of world oil production capacity, had committed to holding about 8 million b/d of crude off the market in April -- 6.9 million b/d in official OPEC+ cuts and a voluntary additional 1 million b/d cut by Saudi Arabia -- as it attempts to support prices through the uneven pandemic recovery.
In May, OPEC+ production quotas will rise a collective 350,000 b/d, with another 350,000 b/d increase scheduled for June and 441,000 b/d in July.
At the same time, Saudi Arabia will unwind its extra cut by 250,000 b/d in May, 350,000 b/d in June, and 400,000 b/d in July.
OPEC+ ministers will convene online June 1 to review their decision
