The decision was adopted at a ministerial meeting in Vienna of the Organization of the Petroleum Exporting Countries (OPEC) and 10 allied producers, including Russia, Mexico and Kazakhstan. covid pandemic.
OPEC+ Alliance, led by Saudi Arabia and Russia, decided in Vienna on Wednesday to cut production by 2 million barrels per day (mbd), the largest reduction in oil supply since May 2020.
In addition, participating ministers agreed to extend cooperation with the aforementioned alliance formed in 2016 for another year. “Petroprice” The effects of the US shale boom will last at least until the end of 2023.
In the final declaration they specify that they have agreed “Adjust global production down 2mbd(…) from November”.
Actual cut is lower than official
Nominally, this amount is equivalent to 2% of the world’s crude oil supply, about twice what was expected by Tuesday in international markets, but the physical reality is that, while equally important, less than expected.
The reason is that most producers are falling short of already established national quotas due to technical capacity problems resulting from inadequate investment.
The alliance as a whole is therefore estimated to be 3.5 to 4mbd below its total quota of 43.85 million barrels per day (mbd) set in October, which includes pumping by 20 countries. (All but OPEC members Venezuela, Iran and Libya are exempt from their commitments to restrict mining).
“We will not cut 2 megabytes, but we will work in that direction,” the current OPEC president admitted. Bruno Jean-Richard Itoua at a press conference.
After emphasizing that attempts have been made to adjust quotas to national capacities, he noted that the actual cuts “something between one million and two million” barrels per day.
OPEC+ will not listen to the West
The actual reductions will ultimately be less than announced, but the measures are clear. “No” To the West, which has long called on OPEC to open up in order to keep fuel and energy cheap and inflation under control, In the midst of the current energy crisis.
Through a statement by his National Security Advisor, Jake Sullivan and your financial advisor Brian Deeds american president, Joe Biden He said OPEC+’s decision was “short-term” because “the global economy continues to face adverse consequences” from Russia’s invasion of Ukraine.
At a press conference in Vienna, Saudi Arabia’s energy minister said: Abdel Aziz bin Salman He declined to answer questions from Efe about OPEC+’s position on the US response.
attract oil capital
All ministers present agreed to reiterate that the group will only have technical considerations and not political considerations when making decisions, with the argument that they want to attract investment to the sector. defended the
“We are not jeopardizing the energy market. We are providing security and stability to the energy market,” the OPEC secretary-general declared at a press conference. Haitham Al Geis.
“What we are doing is ensuring that there will be more oil on the market in the years to come. This is not a short-term issue,” said the Emirati minister. Suhail Al Mazrouei.
his Saudi colleague admitted “Frustration” He hinted that the uncertainty created by foreign policies for them created uncertainty among producers, one of which could be the cap on Russian oil prices proposed by the G7. .
“I don’t know what will happen with the (EU) Russian oil embargo.” central bank decisions (Regarding the interest rate hike) do not have “in lockdown in China”, He described the current situation as “very complicated”.
Expectations of OPEC+ production cuts have already caused the price of ‘black gold’ to skyrocket in recent days, and prices continue to rise today after learning of the decision adopted in Vienna.
in the London market Brent crude closed at $93.48 a barrel, It is up 1.83% compared to yesterday’s close and is up 6.29% since Monday.
Analysts expect Brent prices to rise above $100 a barrel again in the coming months.
OPEC+ We will meet again on December 4th.