The alliance OPEC+leadered by Saudi Arabia Y Russiaopted today, one day before the entry into force of the European embargo to Russian crude and two days after the adoption of a price capfor keeping its pumping cut in 2023.
In a joint statement at the end of a teleconference, the ministers of the 13 partners of the Organization of the Petroleum Exporting Countries (OPEC) and 10 independent producing nations, including Russiareaffirmed their previous and controversial decision to withdraw 2 million barrels per day from the market (mbd) of crude.
after that sharp 2% cut in world oil supplywhich was the highest adopted by the group since April 2020 and caused anger especially in Washington, the group’s pumping level was established at 41.85 mbd.
That quota excludes extractions from OPEC partners. Venezuela, Iran Y Libyaexempt from the commitment to limit their production due to the involuntary falls that their oil industry has suffered as a result of conflicts and sanctions.
RANGE OF UNCERTAINTIES
After the sharp and surprising cut in October, caution once again prevailed within the OPEC+ this Sunday, one day before the embargo on all imports of crude oil from Russia with which the European Union (EU) hopes to reduce the income with which Moscow finances its war in Ukraine.
Added to this is the unprecedented decision, adopted on Friday by the countries of the EU and of the G7beside Australiato cap the price of a Russian barrel at a maximum of 60 dollars.
The Kremlin has assured that it will cut off its sales to nations that apply that cap.
The impact of the measure remains to be seen, as it arouses both the expectation of a cheaper energyAs the fear of a shortage and a new increase in cost of fuels.
Another unknown that may affect oil demand is the recent relaxation of anti-covid measures in several Chinese cities, decided after strong protests by the population against the severe restrictions.
On the supply side, the effect that the end of the release of barrels from US strategic reserves will have this month is unknown.
A “NECESSARY AND CORRECT” CUT
When agreed at a meeting in Vienna on October 5, the 2 mbd reduction surprised the markets due to its large volume and immediately prompted a sharp rise in “petroprices”, unleashing the ire of consuming nations.
The government of The US then accused Riyadh of siding with Russia and described the decision as “wrong”, both for its impact on the recovery of the world economy, and for undermining Western sanctions imposed on Moscow for its aggression against Ukraine.
Saudi Arabiathe natural leader of OPEC for being by far the largest oil exporter on the planet, then rejected the criticism and this Sunday it achieved the explicit support of all partners.
In their final statement, the ministers assured that the reduction in pumping “was driven exclusively by market considerations”, whose recent evolution showed that it was “necessary and correct to stabilize world oil markets.”
They further stressed that they will continue to “adhere to the approach of being proactive and preventive,” willing “to meet at any time” to take immediate additional action if necessary.
PRE-WAR PRICES
The sustained cheapening registered by oil since mid-October, mainly pressured by lower fuel consumption in Chinaseems to have given right to OPEC+.
The value of the barrel has lost everything it had gained during the year and has returned to the level it was before the start of the Russian invasion of Ukraine at the end of February, although it maintains a high volatility.
The oil Brenta benchmark in Europe, stayed on Friday in $85.62/barrel, 1.45% less than at the end of the previous session; while that of the US intermediate oil of Texas (WTI) fell by 1.5 %, to $79.98/barrel.
These prices are far from the peaks of almost 130 dollars Registered in early March.
The next regular OPEC+ conference has been convened for June 4, 2023, although the internal JMMC monitoring committee, which will meet every two months, may call an extraordinary meeting at any time.
(With information from EFE)
Keep reading:
The G7, the European Union and Australia reached an agreement to put a ceiling price on Russian crude
What does the European Union embargo on Russian oil mean and how much will it affect the invasion of Ukraine?
Source-www.infobae.com