4 April 2023 - 16:40
  • News ID: 470764
OPEC+ cut risks straining tight oil market: IEA

SHANA (Tehran) – Oil production target cuts announced by the OPEC+ group over the weekend risk exacerbating a strained market and pushing up oil prices amid inflationary pressures, the International Energy Agency (IEA) said on Monday.

"Global oil markets were already set to tighten in the second half of 2023, with the potential for a substantial supply deficit to emerge," the Paris-based energy watchdog said in a statement, Reuters reported.

"The new OPEC+ cuts risk exacerbating those strains and pushing up oil prices at a time when strong inflationary pressures are hurting vulnerable consumers around the world."

Saudi Arabia and other OPEC+ oil producers have announced voluntary cuts to their production amounting to 1.66 million barrels per day (bpd), calling it a “precautionary measure” aimed at market stability.

In October, OPEC+, which comprises the Organization of the Petroleum Exporting Countries and 10 allies led by Russia, agreed on output cuts of two million barrels per day from November, angering Washington because tighter supply boosts oil prices, Al Jazeera reported.

Sunday’s unexpected voluntary cuts, which start from May, come in addition to the ones already agreed in October.

Riyadh said it would cut output by 500,000 bpd while Iraq will reduce its production by 211,000 bpd, according to official statements.

The United Arab Emirates said it would cut production by 144,000 bpd, Kuwait announced a cut of 128,000 bpd while Oman’s cut will be 40,000 bpd and Algeria’s 48,000 bpd. Kazakhstan will also cut output by 78,000 bpd.

Russia said it would extend a voluntary cut of 500,000 bpd until the end of 2023.

Moscow announced those cuts unilaterally in February after the introduction of Western price caps.

News ID 470764


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