Opec+ makes big oil cut to boost prices
- The larger-than-expected drop in production – by 2 million barrels per day – could lead to higher pump prices and deal the global economy another blow
- The decision could also help Opec+ member Russia weather a looming European ban on most of Moscow’s oil
The Opec+ alliance of oil-exporting countries decided on Wednesday to sharply cut production to support sagging oil prices, a move that could deal the struggling global economy another blow and raise politically sensitive pump prices for US drivers just ahead of key national elections.
Energy ministers cut production by a larger-than-expected 2 million barrels per day starting in November after gathering for their first face-to-face meeting at the Vienna headquarters of the Opec oil cartel since the start of the Covid-19 pandemic.
The group said the decision was based on the “uncertainty that surrounds the global economic and oil market outlooks”. Saudi Energy Minister Abdulaziz bin Salman stressed the cartel’s stated role as a guardian of stable energy markets.
“We are here to stay as a moderating force, to bring about stability,” he told reporters.
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Besides a token trim last month, the major cut in the amount of crude that Opec+ ships to the world is an abrupt turnaround from months of restoring deep cuts made during the depths of the pandemic. As demand rebounded, global energy prices have swung wildly since Russia invaded Ukraine, helping fuel inflation that is squeezing economies around the world.