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(OPEC +) cuts production quotas by two million barrels per day

05-10-2022

The member countries of the (OPEC +) alliance agreed today, Wednesday, to reduce oil production quotas by two million barrels per day, starting from next November. This decision came at the conclusion of a meeting of the oil ministers of the 23 countries affiliated with the alliance with the aim of supporting prices that witnessed in the third quarter the first quarterly loss in two years. The (OPEC +) ministers stressed in their final statement that the decision to cut was dictated by the uncertainty surrounding the prospects for the global economy and the oil market, in addition to the need to strengthen the long-term guidance of the oil market. They considered their decision today in line with the successful approach of acting proactively that has been consistently adopted by (OPEC) and non-OPEC + countries. The (OPEC +) ministers reaffirmed in their final statement the decision of the tenth ministerial meeting of member states and non-OPEC countries on April 12, 2020, which was approved in subsequent meetings, including the 19th ministerial meeting of member and non-OPEC countries in (APEC) in July 18, 2021. The final statement stated that the Joint Ministerial Committee was given the mandate to hold additional meetings or request a ministerial meeting of (OPEC +) at any time to address market developments if necessary. The 34th ministerial meeting of OPEC and non-OPEC countries is scheduled to be held on December 4, 2022. These cuts are considered the largest of their kind approved by (OPEC +) since 2020, despite Western pressure on producers to raise production levels in light of the current energy crisis caused by the war in Ukraine. It is expected that oil prices will witness a significant increase after the decision to reduce the supply of crude. Oil prices fell to about $90, after they were $120 three months ago, due to fears of an economic recession in the world in light of the rise in the value of the dollar.