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
Aden under curfew, as problem in Yemen's south deepens

Aden under curfew, as problem in Yemen's south deepens

The port city of Aden, in Yemen's south, has been put under curfew, as the rift in the country between  the Saudi led coalition which  backs Yemen's presidential governing council, and the southern forces led by the Southern Transitional Council (STC), deepens. Abdul Rahman al-Mahrami, a member of the Yemeni Presidential Governing Council and commander of the al-Amalik brigades, has ordered a curfew in the temporary capital, Aden, "to maintain security". "A curfew has been imposed throughout Aden Governorate from 9:00 p.m. to 6:00 a.m., in accordance with the instructions of Commander Abdul Rahman al-Mahrami, a member of the Presidential Management Council," the statement said. It states that only security and military personnel, as well as medical and technical teams with approved permits, will be allowed to move in the area during these hours. Yemen's presidential council, which is backed by Saudi Arabia and which already is in a struggle with the Houthi Movement in the north of the country who also occupy the capital Sanaa, two days ago issued an order for the arrest of the head of the Southern Transitional Council (STC),, Aidarous al Zubaidi. The STC have wide support among people in the South, and advocate that South Yemen restores its independence. The coalition warned of further escalation in Aden, long regarded as an STC stronghold, as the Presidential Leadership Council (PLC) chief accused STC leader Aidarous Al Zubaidi of “high treason” and announced the revocation of his membership in the governing body. The moves mark a sharp escalation in tensions within the anti-Houthi camp, despite National Shield Forces, rivals of the STC and former allies, having recently retaken control of Hadhramaut and Mahra from southern fighters. The STC’s takeover of the two regions last month angered Saudi Arabia and contributed to igniting the current internal conflict. (click the picture to 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)