OPEC logo on a sign at the group’s headquarters in Vienna, Austria.
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On Monday, a group of the world’s most powerful oil producers agreed on a small amount of production cuts from next month, surprising energy markets at a time of considerable turmoil.
OPEC and its non-OPEC partners, an influential energy alliance known as OPEC+, have decided to cut their output target by around 100,000 bpd from October.
Energy analysts have widely expected that the group will be on track with its production policy.
Last month, OPEC + agreed to increase oil production by only 100,000 barrels per day. This small increase was interpreted by many as a pushback against US President Joe Biden following his visit to Saudi Arabia to ask the OPEC kingpin to pump more to cool prices and help the economy. Global.
OPEC+ said in a statement on Monday that the decision to return to August production levels was due to the upward correction “aimed at September only”.
The next OPEC+ meeting is scheduled for October 5.
Oil prices traded sharply higher on Monday. International standard Brent crude oil futures rose 3.9% to $96.63 a barrel around 1:45 p.m. London time, while West Texas Intermediate USA Futures contracts rose 3.6% to $90 a barrel.
Oil prices have fallen about 25% since early June after hitting a multi-year high in March. The decline was fueled by growing concerns that interest rate hikes and related restrictions Covid in some parts of China could slow global economic growth and cut oil demand.
Monday’s announcement from OPEC+ comes amid Acrimonious and escalating energy dispute between Russia and the Westwith many in Europe deeply concerned about the prospect of recession and gas shortages in the winter.
Meanwhile, market participants are closely watching the prospect of a supply increases from Iranian crude oil if Tehran can secure a new version of the 2015 nuclear deal.
G-7 backs Russia’s oil price cap
European gas prices more than 25% increase on Monday after Russian state energy giant Gazprom announced it will not reopen the main gas pipeline to Europe.
Gazprom said the indefinite shutdown was due to an oil leak in the turbine. The Nord Stream 1 pipeline, which connects Russia to Germany via Baltic Sec, was scheduled to reopen on Saturday after three days of maintenance.
The Kremlin’s shutdown of European gas flows follows a joint statement by the Group of Seven Economic Powers in favor of a plan to implement a price-limiting mechanism for Russian oil exports.
The OPEC+ statement comes amid a bitter energy dispute between Russia and the West.
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The G-7 initiative is designed to undermine Russian President Vladimir Putin’s ability to fund the war in Ukraine. Russia said it would stop selling oil to countries that impose price caps on Russian energy exports.
EU policymakers have accused the Kremlin of weaponizing energy supplies to sow instability across the 27-nation bloc and raise energy prices amid the Kremlin’s assault on Ukraine.
Moscow denies any blame for the Nord Stream 1 shutdown.
