Opec+ decides to cut production despite Russia’s objection
09 Sep 2022
A meeting of the Organisation of Petroleum Exporting Countries (Opec) on Monday endorsed a decision to cut the collective oil production target by 100,000 barrels per day (bpd) for October, resisting objections that Russia reportedly raised against production cuts.
However, on Tuesday, energy ministers of the Opec+ agreed to return to the production target levels of August, saying that last month’s increase was intended only for September.
A Wall Street Journal report, citing unnamed sources close to the cartel, however, said that Russia would not support a decision to cut production as it would diminish its new role as a major supplier to large Asian oil buyers like China and India.
While several OPEC members have signalled support for such a move, including Saudi Arabia,
Russia, according to reports, did not subscribe to Opec decision to set an oil market supply surplus of 900,000 bpd as its baseline scenario for this year and next. Russia, in fact, voiced its objections to a production cut last week at a preliminary meeting.
A Joint Ministerial Monitoring Committee (JMMC) of the Opec+ oil producer group had supported a 100,000-bpd cut during an earlier meeting.
Opec+ is estimated to be some 2.9 million bpd behind collective quotas and the proposed 100,000 barrels a day cut may not make any impact.
OPEC+, however, decided that it could call a meeting at any time to discuss other actions. It also decided to “Request the chairman to consider calling for an Opec and non-Opec ministerial meeting anytime to address market developments, if necessary.”
Opec’s next regular monthly meeting is scheduled for 5 October.
Opec+ meeting, however, helped oil prices jump more than 3 per cent in early trade. US benchmark WTI crude hit the $90 per barrel mark, while North Sea Brent crude was up 3.5 per cent at $96.64.