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
Russian attacks against Ukrainian civilians continue

Russian attacks against Ukrainian civilians continue

Rescuers in Ukraine are continuing their search for survivors in the wreckage of a big shopping centre hit by Russia on Friday. Sixteen people were killed and 130 injured when two drones hit the busy centre in Kryvyi Rih in quick succession in what is known as a double-tap strike. Four people are still missing. The search and rescue operation could last for another two days. President Volodymyr Zelensky condemned the "cynical and despicable" attack in which the second drone targeted emergency workers. The sides exchanged more fire overnight, with Ukrainian attacks said to have killed at least four people in Russia, including two children, and three people reported dead by Kyiv as a result of Russian strikes. The death toll from Friday's attack reached 16 after another body was retrieved from the rubble overnight, said Dnipropetrovsk regional head Oleksandr Hanzha. "We're doing everything possible to speed up... the search and rescue operation," he told Ukrainian TV on Saturday morning. (click image tio read more)

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)