London: The global oil producing cartel OPEC has agreed to cut production by 2 million barrels a day in a move that will most likely push up energy prices and help oil-exporting Russia pay for its war in Ukraine.
The decision by the 23-member group – which includes Saudi Arabia, Iraq, the United Arab Emirates and Kuwait – also threatens to ramp up tensions with the West as the United States called the surprise decision “shortsighted”.
OPEC’s headquarters in Vienna.Credit:AP
OPEC’s de facto leader, Saudi Arabia, said the cut – the equivalent of equal to 2 per cent of global supply – was necessary to respond to rising interest rates in the West and a weaker global economy.
Loading
Oil prices remain high by historical standards and, with the likelihood of a large production cut becoming clear, Brent Crude, the international benchmark, rose to $91.50 a barrel on Wednesday — up 8 per cent since last week.
European Union countries had agreed to a US plan only hours earlier to impose a price cap on Russian oil exports, joining an effort by Western countries – including Britain, Canada, Japan and Australia – to drive down prices of crude and fuel.
Saudi Arabia and other Gulf countries feared this plan would cut oil prices across the board and could even be used against them in future.
Loading
The decision could worsen an energy supply crunch tied to the war in Ukraine which threatens widespread blackouts in the European Union this winter. The EU is moving to shore up…
