OPEC will maintain oil production cuts with gloomy economic outlook and sanctions on Russia

OPEC will maintain oil production cuts with gloomy economic outlook and sanctions on Russia

The group of oil countries decided this Sunday not to modify its production target, while oil markets assess the impact of the economic slowdown in China and the cap imposed by the G7 and the European Union on Russian oil prices.

An expected decision. The OPEC oil countries, led by Saudi Arabia, and allied producers, including Russia, have not modified their oil production targets for the world economy, this amid uncertainty about the impact of new Western sanctions against Russia, which could withdraw significant amounts of oil from the market.

At a meeting of ministers on Sunday, just a day before the planned start of two measures aimed at affecting Russia’s oil revenues in response to its invasion of Ukraine, it was still unclear how much Russian oil the measures could remove from the world market. , although there are fears that it would reduce supply and drive up prices.

The action is a European Union boycott of most Russian oil and a $60-a-barrel cap on Russian exports imposed by the EU and the Group of Seven, G7.

Since the start of the invasion in the Ukraine, Russia, the world’s second largest oil producer, has been able to redirect much of its old shipments to Europe to clients such as India, China and Turkey.

The OPEC+ statement rejected criticism of the October decision in light of the recent weakness in oil prices, arguing that this cut had “retrospectively recognized by market participants as the necessary and correct course of action to stabilize world oil markets.

Melissa Galbraith
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