Cartel cuts production by 2 million barrels per day despite strong U. S. pressureU. S. Supply Cut Additional
OPEC’s oil cartel and its allies agreed to a bigger-than-expected cut in oil production targets despite significant pressure from the United States.
OPEC’s organization of the oil-producing countries signed a 2 million barrel production cut consistent with the day, beating earlier forecasts in the week for cuts of 1 to 1. 5 million barrels, cutting in a tight market.
The decision, led by Saudi Arabia and Russia, sent the price of Brent crude up 2% to $93. 80, its point since Sept. 15.
Biden’s management had hoped to convince Middle Eastern countries not to cut supplies, which could further drive up fuel costs and contribute to skyrocketing inflation.
Asked about OPEC’s resolution in the path to the hurricane in Florida, Biden said he found it “unnecessary. “
National Security Adviser Jake Sullivan and National Economic Council Director Brian Deese said the president was “disappointed by the short-sighted decision . . . while the world economy is grappling with the lingering negative effect of Putin’s invasion of Ukraine. “.
Founded in 1960, the cartel of the world’s largest oil producers became a political and economic force with the U. S. oil embargo. UU. de 1973-1974, which caused oil costs to skyrocket. The club is made up of thirteen countries, with Saudi Arabia being the largest producer. followed through Iraq and Iran.
In response to the fall in the value of oil between 2014 and 2016, OPEC joined forces with Russia in December 2016 to agree to a production cut of 1. 8 million barrels per day. This brake, the first of its kind in 15 years, drove up the price. of oil. In May 2017, the outages were extinguished until the end of March 2018. The official members of OPEC are: Algeria, Angola, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Republic of Congo, Saudi Arabia, United Arab Emirates and Venezuela. The accession of Indonesia and Qatar has expired.
The OPEC group, known as the “Vienna Group,” adds 10 non-member countries, plus Kazakhstan, Mexico and Russia. Together, these nations get 55% of oil production and hold 90% of the world’s oil reserves.
They said OPEC’s resolution “will have the maximum negative effect on low- and middle-income countries that are already recovering from high energy prices. “
In response, they said, Biden had ordered the release of an additional 10 million barrels from the U. S. strategic oil reserve. It has been sent to the U. S. government next month, following previous releases in March, and said it ordered an additional buildup in supply.
Although oil costs have fallen from the highs of around $130 a barrel seen earlier this year when the Russian invasion of Ukraine curtailed supplies, motorists in the UK and US are still in the U. S.
OPEC has failed in recent months in planned production increases due to a lack of investment in oil fields through some OPEC members and losses in Russian production.
The invasion of Ukraine has rattled global oil markets, with Western nations shunning Russian oil and Russian exporters sending to India and China.
Oil intake has recovered from pandemic lows, peak costs and coronavirus outbreaks in China have reached expansion projections for 2022.
Democratic experts say the production cut represents an “October surprise” through Crown Prince Mohammed and his close ally, Donald Trump.
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The move also undermines Biden’s strategy of exerting economic pressure on Russia, which relies heavily on oil revenues to continue his disastrous invasion of Ukraine.
Biden’s management had attempted a last-minute lobbying effort in the Gulf to spare him the cut, which is twice as big as the White House feared.
In the UK, emerging oil tariffs will increase motorists’ concerns about the refuelling fee at the pump.
RAC fuel spokesman Simon Williams said: “Such a deep relief in oil production will inevitably lead to higher oil prices, driving up the wholesale price of fuel. The question is when and to what extent companies decide to pass on those higher costs to their esplanades. Despite 3 consecutive months of declining pump prices, we know that in many cases, drivers are being charged more for refueling today than they deserve based on average wholesale prices in recent weeks.
Jamie Maddock, equity research analyst at investment firm Quilter Cheviot, said: “Lately we are witnessing a globally coordinated release of strategic oil reserves, mainly from the US. The U. S. government aims to reduce the value of oil and consumers at a time when inflation has soared and the burden of living has intensified. This continues, however, this additional relief at source may mean that the benefits of this program will be nullified if this resolution is fully implemented. »
Maddock said costs could also return later this year as Western countries banned Russian crude oil starting Dec. 5.
The OPEC assembly took position in Vienna for the first time since March 2020, when the covid pandemic forced it online, after a last-minute change.