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
Borrell tells the European Parliament that the situation in Afghanistan was critical, but the EU will remain engaged

Borrell tells the European Parliament that the situation in Afghanistan was critical, but the EU will remain engaged

Borrell underlined that the European Union will make every effort to support the peace process and to remain a committed partner to the Afghan people. "Of course, we will have to take into account the evolving situation, but disengagement is not an option.  We are clear on that: there is no alternative to a negotiated political settlement, through inclusive peace talks.
Editor's choice
News
Mystery surrounds the crash of a Turkish airline in Georgia which resulted in the death of 20 Turkish Airforce personnel

Mystery surrounds the crash of a Turkish airline in Georgia which resulted in the death of 20 Turkish Airforce personnel

​ Twenty Turkish Airforce personnel died when a military plane crushed on the Georgian side of the Azerbaijan - Georgia border on Tuesday (11 November). The C130 took off from Ganja and was heading to Merzifon, transporting service members that had participated in Azerbaijan's Victory Day celebrations. Half an hour after takeoff, the aircraft lost altitude and broke apart in mid-air over a mountainous area on the Georgian border. Lockheed C130 Hercules have been in service with Turkey since the 1960s and are considered among the most reliable in their class. However, some of these aircraft are 50–60 years old. In October, the Turkish Ministry of Defense announced plans to replace them with new C130J Super Hercules models, with deliveries expected to begin in the coming years. All aircraft fragments have already been collected for technical examination. The cause of the crash has not yet been officially determined. A Turkish expert and retired military officer Coşkun Başbuğ noted on CNN Türk, a technical malfunction "should be ruled out" as the cause of the crash. "Various possibilities should be considered, but the first thing to consider is that the C-130 is a time-tested military transport aircraft, the last known incident involving which occurred in 1982." "A technical malfunction should be ruled out as the cause of the crash. The same applies to weather conditions, as the relevant authorities would have reported bad weather. The remaining theories include a mid-air collision, sabotage, or an attack," he emphasized. Former Turkish Armed Forces Logistics Commander and retired Army General Erdoğan Karakuş stated in an interview with Turkish television that although the C-130 aircraft are old, they have undergone a complete modernization in Turkey, and their technical condition is thoroughly inspected before each flight. The Turkish Air Force is expected to operate the C-130 aircraft until 2040. ​

Popular

Editor's choice
News
Mystery surrounds the crash of a Turkish airline in Georgia which resulted in the death of 20 Turkish Airforce personnel

Mystery surrounds the crash of a Turkish airline in Georgia which resulted in the death of 20 Turkish Airforce personnel

​ Twenty Turkish Airforce personnel died when a military plane crushed on the Georgian side of the Azerbaijan - Georgia border on Tuesday (11 November). The C130 took off from Ganja and was heading to Merzifon, transporting service members that had participated in Azerbaijan's Victory Day celebrations. Half an hour after takeoff, the aircraft lost altitude and broke apart in mid-air over a mountainous area on the Georgian border. Lockheed C130 Hercules have been in service with Turkey since the 1960s and are considered among the most reliable in their class. However, some of these aircraft are 50–60 years old. In October, the Turkish Ministry of Defense announced plans to replace them with new C130J Super Hercules models, with deliveries expected to begin in the coming years. All aircraft fragments have already been collected for technical examination. The cause of the crash has not yet been officially determined. A Turkish expert and retired military officer Coşkun Başbuğ noted on CNN Türk, a technical malfunction "should be ruled out" as the cause of the crash. "Various possibilities should be considered, but the first thing to consider is that the C-130 is a time-tested military transport aircraft, the last known incident involving which occurred in 1982." "A technical malfunction should be ruled out as the cause of the crash. The same applies to weather conditions, as the relevant authorities would have reported bad weather. The remaining theories include a mid-air collision, sabotage, or an attack," he emphasized. Former Turkish Armed Forces Logistics Commander and retired Army General Erdoğan Karakuş stated in an interview with Turkish television that although the C-130 aircraft are old, they have undergone a complete modernization in Turkey, and their technical condition is thoroughly inspected before each flight. The Turkish Air Force is expected to operate the C-130 aircraft until 2040. ​