OPEC and Russia decide to maintain oil production cuts

The OPEC+ alliance, led by Saudi Arabia and Russia, decided this Sunday (4) to continue to implement, in 2023, the sharp cut in oil production decided two months ago.

In a statement, the Ministers of Energy and Petroleum of the 23 countries of the alliance reaffirmed that the reduction of their joint pumping by 2 million barrels per day (mbd), agreed in October 5, is the “necessary” and “correct” measure.

They also decided to convene their next regular conference for June 4, 2023, according to the note issued by the Organization of the Petroleum Exporting Countries (OPEC).

However, they emphasized that the alliance’s internal monitoring committee will meet every two months and may convene an extraordinary conference if the market situation so require.

In this context, they expressed their willingness “to meet at any time and to take immediate additional measures, if necessary”.

In their de In their final statement, the ministers emphasized that the controversial supply cut that took effect on November 1 “was driven solely by market considerations”.

“In hindsight, market participants recognized it as the necessary and correct measure to stabilize world oil markets”, they added.

However, the United States, which had asked Saudi Arabia for an increase in oil production to lower prices, considered that the measure helps Russia finance its war against Ukraine, and the Joe Biden government said it intends to “review” its relationship with the Riyadh monarchy.

On Friday (2), the The European Union has decided to impose a ceiling on the price of Russian oil of US$ 60 per barrel. The measure, to which the G7 powers and Australia adhered, would not directly affect the community territory because it coincides with the entry into force, this Monday (5), of an embargo on crude oil imported from Russia, except that purchased by Hungary by pipeline.

However, it prohibits European shipping companies from transporting Russian oil to third countries if it is sold at a price higher than the fixed one, and the same applies to insurance companies contracted to the transport of Russian crude oil.

The EU political agreement guarantees that if the market price falls below US$ 60 a barrel, the limit will be updated to be at least 5% below what is on the market.

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