VIENNA— The alliance of oil producers OPEC+, led by Saudi Arabia and Russia, decided Wednesday in Vienna to reduce its production by 2 million barrels per day, the biggest cut since the pandemic.
The announcement was made by Iran’s Deputy Oil Minister Amir Hossein Zamaninia at the end of a conference of the Organization of Petroleum Exporting Countries (OPEC) and its 10 allied producing countries, including Russia, Mexico and Kazakhstan.
The production cut was already expected and is justified by the sharp drop in oil prices, and Wednesday’s decision is expected to encourage a recovery in the amounts paid to OPEC.
Oil prices fell from about $120 to $90 (from about 12.1 euros to 91.3) three months ago due to fears of a global economic downturn, but also by rising US interest rates and rising dollar value.
The drop in production, which will begin in November, is the largest since May 2020, when the Covid-19 pandemic was in the beginning and was approved by alliance members just over a month before the Midterm elections in the United States.
Us President Joe Biden has been fighting for months to try to contain the price hike, which is eroding the purchasing power of families and even went to Risin in July to defend his position.
Asked about his arrival in Vienna for Wednesday’s meeting, UAE Energy Minister Souhail ben Mohammed Al-Mazrouei claimed that OPEC+ is a “technical organization” that is not governed for political reasons.
Created in 1960 to regulate the production and price of crude oil through the establishment of quotas, OPEC extended in 2006 to Russia and other partners to form OPEC+.
In a historic gesture, alliance members decided in the spring of 2020 to cut their production by nearly 10 million barrels a day to cope with the collapse in demand linked to the Covid-19 pandemic.
Already last September, the group had slightly lowered its target (by 100,000 barrels), claiming it was ready to decline further.
After shooting earlier in the week, the price of a barrel of North Sea Brent was at $91.84 Wednesday morning, while its US counterpart, WTI, was at $86.36 a barrel.
Source: NAM NEWS NETWORK