The Cradle, September 6, 2022 — OPEC+ nations want to reduce oil output to compensate for high inflation and fears over a global economic recession.
OPEC and allied countries are cutting their output by 100,000 barrels of oil per day.
The decision was made on 5 September by Energy Ministers in a rather symbolic move to cut back last month’s increase in production.
Just last month, Saudi Arabia’s Energy Minister proclaimed that the group could cut down supply any time it needed to combat a slump in the price of crude.
The move sets difficulties for the US government, which pleaded to lift the burden on consumers ahead of the mid-term elections on 8 November 2022.
Prices have slowly decreased since June’s high of $120 per barrel. The lack of demand due to recession fears, and a strong US Dollar is partially responsible for the decrease.
Another factor could be a proposed price cap that major western countries consider imposing on Russian imports. Russia – a leading member of the OPEC+ bloc – also agreed to a decrease in oil production.
Markets could ease over the possibility of a new Iran nuclear deal, freeing up 1 million barrels of oil in the coming months. However, tensions between the US, Iran, and Israel have been flaring up in recent weeks, as Tel Aviv does its best to see the new deal fail.
Fuel prices saw a high in June with up to $5 per gallon in the United States, which have since then come down to $3.82 on average. The drastic increase in price was due to US and European sanctions against the Russian energy sector.
Meanwhile, other countries are increasing imports of Russian oil and gas, with some accused of reselling it to their European partners at higher prices.
The Syrian government has also accused the US of systematically stealing the country’s oil. Syria’s losses as a result of Washington’s oil theft campaign are reported to reach as high as $107 billion.
The US has also doubled down on its strategy of theft in Syria, with a new base set up in Syria’s northeastern Hasakah governorate.