Written by – Elijah J. Magnier:
The 23 OPEC+ members’ decision to reduce energy production by two million barrels per day (equivalent to 2% of the global energy production) from November and for one year is highly significant to the west and Russia. This decision has not been adopted to support Moscow or to challenge and express hostility towards the US. Instead, it stems from a reflective choice that puts first the interests of the oil-producing countries and a necessity to reduce the previous surplus, which amounted to three and a half million barrels, an amount that the world no longer urgently needs. Indeed, suppose the COVID-19 epidemic spreads in China. In that case, leaders could close down the country, and oil consumption would undoubtedly fall, reducing the price of oil and, consequently, causing harm to the interests of OPEC+ nations.
In 2016, OPEC+ was created by adding 10 new members of its original 13 oil producers’ countries to keep the prices steady by lowering the supply when the demand declines. Saudi Arabia and Russia produce each 10 of the 42 million barrels of oil per day of the total OPEC+ production. In 2020, OPEC+ cut its oil production by 10 million barrels per day to boost the crashing price due to the lack of buyers when the world was hit by the COVID-19 pandemic. At the beginning of the war in Ukraine and due to the overwhelming fear that hit the international market for a possible shortage of Russian oil, the price rose to $122 a barrel to fall below $89 just before the decision to cut the production this week.
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Proofread by: Maurice Brasher