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The Cut in OPEC Oil Production Was Joined by Several Countries Including Russia, Saudi Arabia, the UAE, and Others
The Organization of the Petroleum Exporting Countries, OPEC made an announcement last Sunday about an exponential cut in global oil production. According to the announcement made by OPEC, starting in May, approximately 1 million barrels of oil per day will be withdrawn from the market, with this reduction potentially reaching up to 1.6 million barrels per day in July, with the extension of cuts announced by Russia, considering that the country had already reduced oil production to 500,000 barrels per day, according to Poder360.
The decrease in barrels of oil in the market aligns with the topics discussed in the OPEC meeting, which includes the countries that are part of the cartel and Russia, in October 2022. During the meeting, OPEC member countries announced a reduction of 2 million barrels of oil per day, the largest cut in oil production since 2020.
This reduction in OPEC’s oil production was seen by the United States as an alignment with Russia, since a lower supply of oil in the oil and gas sector tends to make the price of oil barrels more expensive.
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Iran said that the Strait of Hormuz is open, but in practice only 1 non-Iranian oil tanker managed to cross in 24 hours — before the blockade, 100 ships passed per day.
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Petrobras completes 1,300 hours of work and 15 km of subsea lines to connect the Búzios 90 well to the P-79 — the platform is ready to produce 180,000 barrels per day and is just awaiting ANP approval.
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Iran declares the Strait of Hormuz completely open this Friday, and the price of oil plummets nearly 10% in a few hours — the largest drop since the beginning of the conflict.
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While the world was paying more for fuel, the 100 largest oil companies on the planet raked in an extra $23 billion in just 30 days of blockage in the Strait of Hormuz.
Saudi Arabia Is Leading in Oil Production Cuts
In both years that OPEC’s oil production cuts occurred, both in 2022 and 2023, Saudi Arabia led the reduction of barrels, with a statement issued last Sunday, the Saudi Ministry of Energy stated that it is “a precautionary measure aimed at supporting the stability of the oil market.”
OPEC cuts in oil barrels per day, by country:
- Saudi Arabia: 500,000;
- Russia: 500,000;
- Iraq: 211,000;
- United Arab Emirates: 144,000;
- Kuwait: 128,000;
- Kazakhstan: 78,000;
- Algeria: 48,000;
- Oman: 40,000.
This new reduction in barrels of oil by OPEC is expected to impact commodity prices, as the Brent crude barrel reached its lowest value since the beginning of the Ukraine war, in March 2022. Future prices of Brent oil rebounded at the end of March 2023, but were still being quoted below US$ 80 last Friday, the 31st.
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