OPEC+ will reduce oil production by 2 million barrels per day

Representatives of countries at the meeting today of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) told the press that the group will reduce production by 2 million barrels of oil per day from November.

This is the biggest drop since April 2020. It shows OPEC+ intends to keep prices high after seven years of low prices, analysts said.

Crude oil prices spiked above $100 a barrel in the first six months of the year due to Russia's military campaign in Ukraine. However, prices then fell by as much as 32% in the past 4 months due to concerns about the global economy. Brent crude at one point fell below $83 a barrel for the first time since January.

This is the second consecutive month that OPEC+ has reduced production. Last month, they agreed to cut 100,000 barrels a day in October.

Today's decision has cast a shadow on the G7 countries' plan to impose a ceiling on the price of Russian oil . It also erased expectations about the possibility of OPEC + increasing supply sharply after months of US diplomatic efforts . The decision was made less than three months after US President Joe Biden's visit to Saudi Arabia - the most influential country in OPEC.

Before the meeting, OPEC+ members said their decision would be a response to the global economic situation, especially China. The blockade campaign to prevent Covid-19 is restraining oil demand here.

Analysts say the reduction in production is a win for Russia, which is also a member of OPEC+. After the war in Ukraine broke out in February, Russia's oil production fell by about 1 million barrels a day. From December 5, the EU's ban on importing Russian oil will also take effect, threatening the country's oil sales. The reduction in production by OPEC+ will also limit Russia's loss of global market share.