OPEC+ to cut oil output by 2mbpd November

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OPEC and its Russia-led allies agreed on a major cut in oil production on Wednesday, a move to prop up prices that could bolster sanction-hit Moscow’s coffers and irk Washington.

The 13-nation OPEC cartel and its 10 Russian-led allies agreed to reduce two million barrels per day from November at a meeting in Vienna, said Iran’s OPEC Governor Amir Hossein Zamaninia.It is the biggest cut since the height of the Covid pandemic in 2020.

Such a move could turbocharge crude prices, further aggravating inflation which has reached decades-high levels in many countries and is contributing to a global economic slowdown.

It could also give Russia a boost ahead of a European Union ban on most of its crude exports later this year and a bid by the Group of Seven wealthy democracies to cap the country’s oil prices.

US President Joe Biden personally appealed to Saudi leaders in July to boost production in order to tame prices which soared following Russia’s invasion of Ukraine earlier this year.

But crude price have fallen in recent months on concerns over dwindling demand and fears over a possible global recession.

Alexander Novak, the Russian deputy prime minister in charge of energy who is under US sanctions, remained mum as he arrived for the group’s first in-person meeting at its Vienna headquarters since March 2020.

Collectively known as OPEC+, the alliance drastically slashed output by almost 10 million barrels per day (bpd) in April 2020 to reverse a massive drop in crude prices caused by Covid lockdowns.

OPEC+ began to raise production last year after the market improved. Output returned to pre-pandemic levels this year, but only on paper as some members have struggled to meet their quotas.

The group agreed last month on a small, symbolic cut of 100,000 bpd from October, the first in more than a year.

Consumer countries had pushed for months for OPEC+ to open taps more widely to bring down prices, but the group ignored them again.

 




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