OPEC+ Surprisingly Cuts Oil Production

OrganizationsInternational Organizations ♦ Published: April 3, 2023; 17:11 ♦ (Vindobona)

The OPEC+ alliance has announced a surprise cut in oil production. There will probably be a reduction of about one million barrels per day from May onward.

Nine oil-producing countries from the OPEC+ group will reduce their daily production in the coming months. / Picture: © Wikimedia Commons; Flcelloguy, CC BY-SA 3.0

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. This was officially announced by OPEC+ in Vienna after a virtual meeting of its Market Monitoring Committee. The day before, the countries involved in the movement had announced cuts surprisingly and individually.

Eight countries, led by Saudi Arabia, Iraq, the United Arab Emirates, and Kuwait, plan to curb their oil starting in May. Saudi Arabia led the cartel with a planned production cut of 500,000 barrels per day. According to ORF, the Saudi Energy Ministry said it was a "voluntary cut."

In addition, Moscow announced that its already restrictive production policy would not be phased out in June as planned, but would be continued from July. The cuts are a "precautionary measure aimed at supporting the stability of the oil market," OPEC+ announced after the meeting. Kremlin spokesman Dmitry Peskov said in Moscow that the decision served to keep prices at a certain level, KleineZeitung reported.

Oil prices reacted to the announced production cuts by soaring, KleineZeitung reported. A barrel of North Sea Brent for delivery in June last cost 84.02 U.S. dollars (77.26 euros). That was 4.13 dollars more than on Friday. The price of a barrel of U.S. West Texas Intermediate (WTI) for delivery in May also rose sharply by 4.07 dollars to 79.74 dollars.