Organization of the Petroleum Exporting Countries (OPEC) and its Russia-led allies have agreed to cut oil production by two million barrels a day at a Vienna meeting. It is the deepest cuts to oil production since the 2020 COVID pandemic.
The cut could spur a recovery in oil prices that have dropped to about 90 dollars from 120 dollars three months ago on fears of a global economic recession, rising US interest rates, and a stronger dollar. However, the cut in real terms might be less than the headline figure, with multiple OPEC members currently producing less than their assigned quota.
US President Joe Biden has expressed disappointment over the OPEC cartel’s decision to slash oil production output. US National Security Advisor Jake Sullivan and top economic advisor Brian Deese said the president is disappointed by the shortsighted decision.
They said the supply cut will hit countries already reeling from high prices while the global economy is dealing with the continued negative impact of Russia’s attack on Ukraine. They said President Biden is ordering another dip into the country’s Strategic Petroleum Reserve, with 10 million barrels set to be put on the market next month in an attempt to dampen price rises.
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