Nine oil-producing countries from the OPEC+ group will reduce their daily production by a total of 1.66 million barrels (159 liters each) in the coming months. OPEC+ officially announced this on Monday in Vienna after a virtual meeting of its market observation committee. The day before, the countries involved in the move had surprisingly and individually announced cuts.
Eight countries, mainly Saudi Arabia, Iraq, the United Arab Emirates and Kuwait, want to throttle their oil from May. In addition, Moscow announced that the existing restrictive subsidy policy would not expire in June as planned, but would continue from July.
“Precautionary measure” or price hike?
The cuts are a “precautionary measure to support the stability of the oil market,” OPEC+ said after the meeting. Kremlin spokesman Dmitry Peskov said in Moscow that the decision was intended to keep prices at a certain level.
Oil prices reacted to the announced production cuts by rising on Monday. A barrel of North Sea Brent for delivery in June cost 84.02 dollars (77.26 euros) last year. That was $4.13 more than Friday. The price of a barrel of West Texas Intermediate (WTI) for delivery in May also rose sharply by $4.07 to $79.74.
Source: Krone
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