The OPEC+ oil cartel decided at a meeting on Sunday (December 4) to maintain their current crude output levels as they haven’t changed their targets for shipping oil to the global economy. The announcement comes amid uncertainty as markets are trying to assess how a slowing Chinese economy will affect demand and how the recent price cap on seaborne Russian oil by EU and G7 nations will impact supply.
The much-awaited decision came just two days after the Group of Seven (G7) nations agreed to a $60 per barrel price cap on Russian oil, even as many nations in Europe are battling an energy crisis.
The Organization of the Petroleum Exporting Countries (OPEC), which is a cartel of 13 countries, led by Saudi and allied producers including Russia, decided to stick to their course agreed upon in October of a production cut of two million barrels per day until the end of 2023.
In a statement, OPEC+ described the decision it took in October as one “which was purely driven by market considerations”. The statement added that it had been “the necessary and the right course of action towards stabilizing global oil markets.”
The move had angered the United States, who blamed the bloc and accused the leaders of siding with Russia despite Moscow’s war in Ukraine.
The next OPEC+ ministerial meeting is scheduled for next year on June 4. But the alliance said it was ready to “meet at any time and take immediate additional measures” to address market developments and support the oil market if necessary.
According to OPEC+, its output was reduced as a result of a dimmer economic outlook. Because of slower Chinese and global growth as well as rising interest rates, oil prices have fallen since October, which has led the market to speculate that the group may reduce output once more.
(With inputs from agencies)
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