The oil alliance OPEC, in cooperation with some non-member countries such as Russia, has announced a surprising reduction in oil production. The group, better known as OPEC +, wants to reduce production by about one million barrels (117.35 million liters) per day from May.
The initiative would come from Saudi Arabia. According to the Saudi energy ministry, it is a “voluntary reduction”. Other members, such as Kuwait, the United Arab Emirates and Algeria, followed suit, while Russia plans to continue the production cuts already decided in March until the end of 2023. This means that from May about one million barrels of crude oil per day less on the market than previously expected.
The influence of the association of 23 countries is still significant. Allianz has a global market share of approximately 40 percent. The throttling is likely related to the fall in oil prices in recent months. After the Russian army invaded Ukraine in the spring of 2022, prices skyrocketed. At that time, a barrel of North Sea Brent cost up to 130 dollars. Prices have plummeted since then, recently the same amount of Brent variety was just under $80.
Source: Krone
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