Vienna — OPEC+, the oil cartel made up of most non-Western producers, is sharply cutting production to stabilize the price of crude oil, which has fallen significantly in recent months.
From November onwards, the alliance of 23 countries will produce 2 million barrels (159 litres each) less per day, the cartel announced in Vienna on Wednesday.
The price of crude has fallen by up to 30% on spot markets since June on concerns of a looming global economic recession.
The cutback will actually be less than the official decision, as a number of oil producers, including Angola, Nigeria and Russia, were already producing less than the amounts stipulated in current agreements, Commerzbank analyst Carsten Fritsch said.
“To that extent, the actual cutbacks will be more limited than what goes on paper,” Fritsch said.
According to the International Energy Agency (IEA), production by OPEC+ members in August was around 3.4 million barrels per day below the agreed level.
“This is down to a lack of investment in oil production infrastructure in Nigeria and Angola for example, as well as Western sanctions on Russia,” Fritsch said.
From December, an EU-wide embargo on Russian crude will come into effect. The country is still supplying around 2 million barrels per day to the bloc.
The global market share of OPEC+ is put at around 40%.
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