Financial Times: OPEC+ plans production cuts of 1 million bpd

People who were “close to the discussions” told the newspaper Financial timing.

This is the first time the group has met for a physical meeting since March 2020. The expanded OPEC+ alliance is led by Saudi Arabia and Russia.

It is expected that the members in the meeting will discuss cutting 1 million barrels per day. In this case, that would be the biggest cut since the start of the pandemic, and it would correspond to more than 1 percent of global supply.

The next increase in oil prices comes at a time when most of the world is struggling to lower energy costs.

Production cuts have the potential to drive a rift with the US, where President Joe Biden is seeking to lower fuel prices for motorists ahead of a crucial midterm election in November.

However, two sources familiar with Saudi Arabia’s thinking said the country wanted to cut production to bolster prices and maintain some production capacity in reserve. The kingdom fears that Russian production will fall sharply later this year when Western sanctions on oil exports are tightened.

Russia is also said to be in favor of a cut as it has seen oil revenues fall in recent months. Buyers forced deep discounts on oil sales as a result of the situation that arose after the invasion of Ukraine. The ruble’s strength has also reduced the amount Russia receives in its own currency for selling oil contracts, which are mostly priced in dollars.

Georgie Burke

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