Dr. Ashraf Ghorab, an economist and vice-president of the Arab Union for Social Development in the Arab Labor System of the League of Arab States, revealed the reasons for the decision by OPEC Plus producers to reduce its daily production by 1.66 million barrels, which will start from next May until the end of this year. The rise in global oil prices, explaining that the first reason is that it is a precautionary measure aimed at supporting market stability and controlling global oil surpluses in the markets.
Ghorab added that there are international reports and statistics that expect the global oil price to reach between 90 to 100 dollars per barrel as a result of this decision by the end of this year, explaining that this leads to price fluctuations in global oil prices, noting that international reports indicate that there is a group One of the reasons behind the decision of OPEC Plus, the first of which is that this is a precautionary measure aimed at supporting and stabilizing the market, in addition to the fact that the banking crisis of Western banks has created a state of global fear of a new banking crisis that causes a slowdown in global growth, which causes a decrease in oil prices, in addition to that in light of Fear of the economic recession the world is going through, which may cause a drop in oil prices.
Release quantities from the Strategic Petroleum Reserve
Ghorab explained that the decision of OPEC Plus to reduce production came following the decision of France and America to release quantities of strategic petroleum reserves in each of them, in addition to the failure of the United States of America to supply its strategic oil reserves in the fiscal year 2023, explaining that the decision of OPEC Plus is a preemptive measure to ensure The current crude oil surpluses in the market did not continue until the second half of this year, and therefore this measure was to control global oil surpluses.
Ghorab indicated that OPEC Plus took this preemptive decision in order to prevent global oil prices from collapsing as a result of the global financial crisis, in addition to preventing a large surplus in the market, in addition to the economic recession and slowdown in gross domestic product that the world is witnessing. A decline in global oil demand from May onwards, which may affect the reduction in the price of oil.
Shortage of petroleum supplies
Ghorab pointed out that the lack of oil supplies may lead to an increase in crude prices, especially at a time when China is witnessing its recovery from Corona, which is the largest importer of oil, and here China and India will be forced to buy more Russian oil, and this leads to a rise in Russian oil prices to more than the ceiling that you set. The Big Seven.
