The Opec + oil cartel is cutting its oil production by two million barrels a day. This corresponds to 2% of the total world production. This is the biggest production limitation since 2020.
The sharp reduction in oil production is no coincidence. Even before the meeting between OPEC and Russia – together OPEC + – on Wednesday afternoon in Vienna, it was assumed that the oil countries intended to do so. The figure of two million barrels a day has also been circulating these days.
With this drop in oil production – the biggest since 2020 – OPEC and Russia want to put an end to the drop in oil prices. It has dropped from $ 120 to just over $ 80 a barrel over the past six months.
Speculation about a significant cut in production has pushed the price of oil up again in the past week. The price of North Sea or Brent oil, the most important price barometer in the world, stood at $ 92 a barrel on Wednesday morning, just before the OPEC + meeting began. After the first reports of the two million barrel reduction, the price of oil was somewhat rudderless. The price first rose, then dropped below Tuesday’s level.
American elections
Most prominent in Vienna was Russian Deputy Prime Minister and former Energy Minister Alexander Novak. He has long played a key role in the rapprochement between his country and the Organization of Petroleum Exporting Countries OPEC and is on the US sanctions list.
By reducing oil production, OPEC + also increases pressure on Europe. The European Union has decided to gradually reduce the supply of oil by ship from Russia since the beginning of December. Crude oil will first be banned, in due course the boycott will be extended to used petroleum products such as diesel and gasoline. At the same time, the G7 – the group of major Western economies – wants to impose a ceiling on Russian oil prices.
OPEC + ‘s drastic cut in production also indicates that OPEC, and particularly its most powerful member, Saudi Arabia, pays little or no attention to US President Joe Biden’s demands to waive such production restrictions. . Biden went to Saudi Arabia earlier this year to push for increased oil production. Americans are currently faced with higher prices at the pump. Ahead of the mid-term US Congressional elections, Biden could lose expensive fuel like a toothache. Compared to Europe, these prices are still much lower.
