Surprise OPEC oil production cut pushes global prices up

Global oil prices have soared after a surprise announcment by several key oil-producing states on Sunday (2 April) that they would cut production by as much as one million barrels per day.

Saudi Arabia, Iraq and several Gulf states all announced that they would cut production by more than one million barrels per day, while Russia also said it would extend its cut of half a million barrels per day until the end of the year.

The price of Brent crude oil is now trading above $84 a barrel after jumping by more than 5%, and shares in oil giants BP and Shell rose by more than 4% on Monday.

The reduction in output is being made by members of the OPEC+ oil producers, who account for about 40% of all the world's crude oil output.

With the announcement, Saudi Arabia is reducing output by 500,000 barrels per day and Iraq by 211,000. The UAE, Kuwait, Algeria and Oman are also making cuts.

According to the official Saudi Press Agency, an energy minister official said the decision was "a precautionary measure aimed at supporting the stability of the oil market".

Speaking to the BBC, Nathan Piper, an independent oil analyst, said that OPEC+'s move appeared to be an attempt to keep the oil price above $80 a barrel in the medium term, given that demand could be hit by a weakening global economy and sanctions have had a "limited impact" on restricting Russian oil supplies.

source: commonspace.eu with BBC
photo: Getty Images

 

Related articles

Editor's choice
News
Russia puts pressure on Armenia ahead of Putin-Pashinyan meeting in Bishkek next week

Russia puts pressure on Armenia ahead of Putin-Pashinyan meeting in Bishkek next week

Russian president, Vladimir Putin, and Armenian prime minister, Nikol Pashinyan are expected to meet in Bishkek next week on the margins of the Shanghai Cooperation Organisation. Russian presidential aide Yury Ushakov confirmed this according to the Russian agency, TASS. “We will have a conversation with Armenian Prime Minister Nikol Pashinyan. Our leaders have already spoken following the elections held in Armenia, so it is fairly clear what the conversation will be about,” Ushakov said. He added that, among other issues, the leaders will discuss Yerevan’s aspiration to join the EU and its cooperation with the Eurasian Economic Union. “We continue to insist that Armenia cannot aspire to EU membership while at the same time receiving enormous benefits from its cooperation within the Eurasian Economic Union. This issue must somehow be resolved. And the President and the Prime Minister will undoubtedly discuss it,” Ushakov said. The meeting comes as Russia continues to put unprecedented pressure on Armenia. Using very undiplomatic language, Russian Foreign Ministry spokesperson, Maria Zakharova, on Friday (28 August), called on Pashinyan to stop shifting responsibility for Armenia's problems onto Russia and the CSTO. In 2022, the Armenian Prime Minister personally refused the deployment of the organization's mission, opting instead for Western mediation in Prague, where he officially recognized Karabakh as part of Azerbaijan, recalled the official representative of the Russian Ministry of Foreign Affairs. Yerevan's attempts to blame Moscow, the church, or its own citizens for the consequences of its own decisions are shameless and contradict historical facts, Zakharova emphasized. "Everyone is to blame in your view. Only you are not to blame." "Nikol Vovayevich, elections in your country have ended. You can stop hanging noodles on the ears of your people. Gather your courage and tell the truth at least once, as it actually happened," wrote Russian Foreign Ministry spokesperson Maria Zakharova, addressing Nikol Pashinyan’s statements yesterday. The five-year program of the Armenian government released this week, only speaks of releations with Russia as a "partnership" and omits the previously used term "strategic alliance". Pashinyan told the Armenian parliament this week, "The events of September 2022 took place right before your eyes. A strategic partnership should mean a strategic partnership. If we write 'strategic partnership' in the document now, you will ask why Russia and the CSTO did not fulfill their security obligations in September 2022. What else do I need to tell you?"

Popular

Editor's choice
Interview
Thursday Interview: Murad Muradov

Thursday Interview: Murad Muradov

Today, commonspace.eu starts a new regular weekly series. THURSDAY INTERVIEW, conducted by Lauri Nikulainen, will host  persons who are thinkers, opinion shapers, and implementors in their countries and spheres. We start the series with an interview with Murad Muradov, a leading person in Azerbaijan's think tank community. He is also the first co-chair of the Action Committee for a new Armenian-Azerbaijani Dialogue. Last September he made history by being the first Azerbaijani civil society activist to visit Armenia after the 44 day war, and the start of the peace process. Speaking about this visit Murad Muradov said: "My experience was largely positive. My negative expectations luckily didn’t play out. The discussions were respectful, the panel format bringing together experts from Armenia, Azerbaijan, and Turkey was particularly valuable during the NATO Rose-Roth Seminar in Yerevan, and media coverage, while varied in tone, remained largely constructive. Some media outlets though attempted to represent me as more of a government mouthpiece than an independent expert, which was totally misleading.  Overall, I see these initiatives as important steps in rebuilding trust and normalising professional engagement. The fact that soon a larger Azerbaijani civil society visits to Armenia followed, reinforces the sense that this process is moving in the right direction." (click the image to read the interview in full)