OPEC+ Members to Cut Production Through Year-End
Curbs to total over 1 million barrels of oil a day, with much of the sum coming from Saudi Arabia
Some members of the Organization of the Petroleum Exporting Countries and its Russia-led allies agreed to cut more than 1 million barrels a day until the end of the year tied to concerns over the stability of financial markets, said Saudi state media and OPEC delegates.
Much of the new reductions are coming from Saudi Arabia, state media said. The cut includes extending 500,000 barrels a day of voluntary reductions from Russia, OPEC’s biggest ally. The decision would add new curbs to a cut of 2 million barrels a day agreed to in October.
The cuts announced in October ratcheted up tensions with the Biden administration, which had hoped the group of petrostates would increase production and help tame rising inflation, driven in part by high energy prices. At the time, the White House accused the 23-member group collectively known as OPEC+ of actively supporting Russian President Vladimir Putin.
The move is likely to push up global energy prices and help oil-exporting Russia pay for its war in Ukraine. Moscow has been hit by bans on its oil exports to Europe and price caps after the invasion.
The latest cut comes as oil prices have tamed somewhat since highs of $100 a barrel last summer. Oil prices have risen close to $80 a barrel after a dispute over Iraqi Kurdish exports disrupted about 500,000 barrels a day of Iraqi exports.
The energy ministry of Saudi Arabia, which would cut 500,000 barrels a day, said in a written statement that its voluntary reduction was a precautionary measure aimed at boosting the stability of the oil markets.
Iraq, which is OPEC’s second-largest oil producer, would reduce its output by 211,000 barrels a day, its oil ministry said.
Saudi Arabia in particular is concerned about the vulnerability of the banking sector. A $1.5 billion Saudi investment in Credit Suisse Group AG was almost wiped out after Credit Suisse’s merger with UBS Group AG .