On Monday, oil prices spiked by more than 1 percent after Saudi Arabia suggested a cut in its shipments by "half a million barrels per day in December," according to CNBC.

Following the discussion of a possible production cut, the price of international benchmark Brent crude rose to $70.83 a barrel.

Saudi Arabia, currently the world's largest oil exporter, said the decision came in response to lower demand following a technical analysis conducted by OPEC - The Organization of the Petroleum Exporting Countries. 

OPEC believes "demand was softening enough" to justify a production cut and to "avoid an unwelcome build-up of unused crude," Reuters reported.

"There will need to be a reduction of supply from October levels approaching 1m barrels … The consensus is that we need to do whatever it takes to balance the market," said Khalid Al-Falih, the kingdom's energy minister, according to The Guardian.

Al-Falih announced that Saudi Aramco, the country's national petroleum and natural gas company, will cut production by 500,000 barrels per day (bpd) in December as well. 

"Ideally, we don't like to cut"

"Ideally, we don't like to cut," Al-Falih said, according to Bloomberg.

"We will only cut if we see a persistent supply glut emerging, quite frankly. We're seeing some signs of this coming out of the U.S. We have not seen the signs globally, nor can we predict that they will persist until 2019."

Russian Energy Minister Alexander Novak said it's "hard to say" if oil markets will be over-supplied next year. "We need to wait some time, to see how the market develops," he told reporters in Abu Dhabi.

Earlier this year, Saudi Arabia was pressured by U.S. President Donald Trump who urged OPEC to increase oil production to "help compensate for a loss of exports from Iran after the reimposition of US sanctions." 

Crude prices hit $80 a barrel in late September and early October over "fears of the impact of US sanctions on Iranian oil exports," according to The Guardian.

In the past few months, oil production from Saudi Arabia, Russia, and the United States alone have risen by 1.05 million bpd, according to Reuters.

Last December, research released by Rystad Energy suggested that the United States is poised to surpass Saudi Arabia and Russia as the world's leading producer of crude oil, for the first time since 1975.

"U.S. crude oil production could pass the levels of both Saudi Arabia and Russia within a year from now."

The U.S. has already ramped up crude production in 2018, increasing output by 10 percent, reaching about 11 million bpd.

Following the election of Trump, the American oil industry has seen a boost, with the new head of state vowing to cut regulations. Trump has also promised to bring in an era of "American energy dominance," partially through reducing red tape around oil drilling.

As the shale fracking increased output in the U.S. over the last few years, Saudi Arabia responded by significantly increasing output and flooding the market with oil, starting in 2015. This saw the price of a barrel drop dramatically from about $100 to a low $26.

Saudi Arabia has been reducing its reliance on oil in recent years

While Saudi Arabia's economy has relied on oil for decades, King Salman and Crown Prince Mohammed bin Salman have taken steps to change that in the future.

The Crown Prince launched the Vision 2030 plan in 2016, aiming to ease Riyadh's reliance on oil and diversify the economy.