Major oil producers including Saudi Arabia will pump less, raising fears of higher petrol prices.
Image source, Getty ImagesSome of the world’s top oil-producing countries have agreed to cut the amount they export in a decision expected to raise oil prices around the world.
Members of Opec+ – a group that includes Saudi Arabia and Russia – said they would slash production by two million barrels per day.
The group aims to support prices which have fallen as the world economy slows.
A barrel of Brent Crude oil was trading at $84.06 in late September – down from highs of around $130 this spring.
However, news of Opec+’s planned production cut pushed prices up by 1% to $92.74 a barrel on Wednesday.
The cut announced by Opec+ is the biggest reduction by the group since 2020.
It comes despite pleas from the US and others to pump more, after prices spiked this spring when the war in Ukraine disrupted supplies.
“The decision is technical, not political,” United Arab Emirates Energy Minister Suhail al-Mazroui told reporters as members of the Organization of the Petroleum Exporting Countries (Opec) and allies gathered in Vienna to discuss the plans.
Despite falling prices and concerns about the global economy, Caroline Bain, chief commodities economist for research firm Capital Economics, said it was unusual timing.
“Global oil stocks are historically low and, so far, high prices have failed to materially dent demand,” she added.
Analysts said that the impact of the cuts is likely to be less significant than its size might suggest, since some countries were already producing less than they had said they would, with Capital predicting a 1% drop in global supplies as a result.