The thirteen members of the Organization and their ten partners have agreed on a drop of “two million” barrels per day for the month of November, the largest reduction since the start of COVID-19.
OPEC + decided on Wednesday to drastically cut oil production quotas to support prices, immediately attracting the wrath of the White House, which accused the cartel of “aligning” with Moscow.
Joe Biden said he was “disappointed with this short-sighted decision”, announcing an upcoming congressional consultation “on additional tools and mechanisms to reduce control” of the group of producers in the energy market.
The American president has been struggling for months to try to stem the surge in prices which is eroding the purchasing power of households, even going so far as to go to Riyadh in July during a very controversial visit.
On board the Air Force One plane, White House spokeswoman Karine Jean-Pierre drove the point home. “It is clear that with its decision the alliance is “aligning with Russia,” she said. It is a mistake”.
Back in Vienna for the first time since March 2020, the thirteen members of the Organization of the Petroleum Exporting Countries (OPEC) led by Saudi Arabia and their ten partners led by Russia wanted to mark the occasion, following long months in videoconference due to anti-Covid restrictions.
After a brief meeting, they agreed to a reduction of “two million barrels per day” for the month of November, according to a press release from the alliance.
“Proactive”
This reduction, the largest since the start of the pandemic, will probably boost prices “at a time when consumers were breathing a sigh of relief”, prices at the pump having fallen sharply since this summer, underlines Craig Erlam, of Oanda .
The two global crude benchmarks have lost ground in recent weeks, far from the highs recorded in March at the start of the war in Ukraine (nearly $140).
After the announcement, prices rose by around 2% around 5:20 p.m. GMT, to 93.43 dollars a barrel of Brent from the North Sea, and 87.86 dollars for a barrel of WTI, its American equivalent.
Faced with criticism at a press conference on the impact for consumers, Saudi Energy Minister Abdel Aziz bin Salman advanced “the various uncertainties” hovering over the world economy. On several occasions, he insisted on the need to be “proactive” to “stabilize the market”.
Bruno Jean-Richard Itoua, Congolese Minister of Hydrocarbons, also defended the desire of the group of producers to “fight once morest volatility”, “fueled by speculation”.
Boon for Moscow
This decision suits Moscow, which will be able to fill its coffers, while a European embargo on Russian oil imports is due to come into force at the beginning of December.
“There is a reason why Russia is in favor of this cut: it is not sure of finding buyers for its oil”, commented the CEO of TotalEnergies Patrick Pouyanné, on the sidelines of a conference in London.
The Russian Deputy Prime Minister in charge of Energy, Alexander Novak, also attacked the policy of European sanctions on Wednesday.
He blasted any cap on the price of Russian crude, a measure being considered by the EU, which would “violate market mechanisms” and might have “a very detrimental effect” on the global industry.
Referring to possible “shortages”, he once once more warned that Russian companies “would not supply oil to countries that use this instrument”, according to comments made on Russian television.
Created in 1960 with the aim of regulating the production and price of crude oil by establishing quotas, OPEC expanded in 2006 to Russia and other partners to form OPEC+.
In a historic gesture, the members of the alliance had decided in the spring of 2020 on cuts of nearly 10 million in the face of the collapse in demand linked to the Covid-19 pandemic.
A declaration was then signed, which OPEC + decided on Wednesday to extend “until the end of 2023”, a sign of the “cohesion” of the alliance vaunted by the Saudi prince, which has not been shaken by the war in Ukraine.
The next meeting is scheduled for December 4, before returning to a half-yearly rhythm as before the pandemic.
