The Organization of Petroleum Exporting Countries (OPEC) and OPEC+ (OPEC+), a consultative body of major oil producing countries such as Russia, decided to cut crude oil production by 2 million barrels a day on the 5th.
OPEC Plus held a meeting in Vienna, Austria that day and made this decision. This is the largest production cut since 2020.
OPEC Plus member countries, including Saudi Arabia, said the decision to cut production was to prevent volatility in oil prices.
UAE Energy Minister Suhail Majruai said the decision was “technical, not political”.
Citing an analysis by Citi Bank, Archyde.com reported that “a significant cut in crude oil would stimulate the Biden administration ahead of the US midterm elections if prices rise,” Archyde.com reported.
He also predicted that the Biden administration will take action in response to this decision, such as the US releasing additional strategic oil reserves (SPR) or strengthening the promotion of ‘NOPEC’, an antitrust law for OPEC.
In the midst of this, Bloomberg News analyzed that the actual production cut would not be large as some OPEC+ member countries are already producing below their quota.
Previously, Opec Plus cut production by 3.6 million barrels per day less than its target in August.
Meanwhile, Brent crude rose to $93 a barrel during the day.
VOA News
*This article referenced Archyde.com.