Oil prices have fallen sharply recently. OPEC wants to counter this by reducing production. It can be more expensive for drivers.
Opec+ oil alliance cuts oil production. As OPEC announced Wednesday in Vienna, from November, the union of 23 countries will produce two million barrels a day (159 liters each) less oil.
OPEC wants to stabilize oil prices
This is the biggest outage in production in a long time. The move aims to at least stabilize the oil price, which has recently fallen by as much as 30 percent. OPEC said it came “given the uncertainty surrounding the global economic and oil market outlook and the need to improve long-term oil market guidance.”
Finally, the US has been demanding that OPEC+ open the oil tap for months – also in the interests of the global economy. At the pumps, the price of gasoline may rise again.
Market share about 40 percent
The influence of the cartel, which expanded to include ten non-OPEC member countries in 2016, remains significant. Allianz has a global market share of approximately 40 percent. OPEC+ defines its actions as responsible. Saudi Arabian Energy Minister Abdulasis bin Salman said that the issue is not just about his own income, but about security of supply and reliability.
A graphic presented at the press conference was intended to show that oil prices rose only a few percent between January and September, in stark contrast to the boom in gas, LPG and coal prices. As a result, the offer has not been completely reduced by the amount announced on paper.
Russia needs to find new buyers
Some states, such as Nigeria, Angola and Russia, are already producing less than previous agreements allowed. According to the International Energy Agency, the oil cartel’s output in August was about 3.4 million barrels per day below the agreed level. “This is also due to a lack of investment in oil production infrastructure like Nigeria and Angola, and western sanctions against Russia,” Commerzbank analyst Carsten Fritsch said.
Russia has to find new buyers for its crude oil from December. Then an almost EU-wide embargo on imports of Russian crude oil will come into effect. So far, about two million barrels are shipped from Russia to the EU every day. An expert committee will discuss the need to adjust oil production every two months in the future.
Since the onset of the corona crisis, committees and ministers have been meeting monthly. Unless there is an extraordinary need, the ministers wish to meet again only twice a year, as before. The next meeting is scheduled for December 4.