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16 June, 2024
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OPEC and Russia agree to cut oil production by 2 million barrels a day

The move comes in an effort to bolster prices ahead of a tough winter due to higher energy prices

Source: The New York Times

OPEC and its allies, including Russia, approved a two million barrel-a-day cut in oil production on Wednesday, its first large reduction in output since the early days of the pandemic.

The gathering of the group, known as OPEC Plus, was the first to be held in person since early 2020. The decision for oil officials to gather in Vienna signaled an intention to make a strong statement to energy markets about the group’s cohesion and its willingness to act quickly to defend prices, analysts say.

Following a series of leaks and rumors about a big cut, the group had little choice but to follow through or risk the consequences of disappointing the markets.

Among those attending the meeting was Russia’s deputy prime minister, Alexander Novak, who has played a key role in fostering cooperation with other major oil-producing countries. Mr. Novak co-chairs OPEC Plus meetings.

The presence of Mr. Novak, who is subject to U.S. sanctions, could come as an embarrassment to officials in Europe when their citizens face what could be a tough winter because of higher energy prices linked to Russia’s war in Ukraine.

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