{"id":4627,"date":"2023-04-03T12:31:19","date_gmt":"2023-04-03T12:31:19","guid":{"rendered":"http:\/\/roydadnaft.ir\/English\/?p=4627"},"modified":"2023-04-03T12:31:21","modified_gmt":"2023-04-03T12:31:21","slug":"oil-prices-soar-as-opec-shocks-the-market","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/4627\/","title":{"rendered":"Oil Prices Soar As OPEC+ Shocks The Market"},"content":{"rendered":"
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On Sunday, OPEC+ announced a surprise production cut of some 1.16 million barrels per day, increasing the total OPEC+ cut to 3.66 million bpd.<\/p>\n\n\n\n

Oil prices soared on the news, climbing by 8% initially before falling back slightly.<\/p>\n\n\n\n

The U.S. criticized the move, saying that it wasn\u2019t wise to make cuts given the current market uncertainty.<\/p>\n\n\n\n

OPEC+ on Sunday surprised oil markets with an announcement that it will reduce its output further, by some 1.16 million barrels daily.<\/p>\n\n\n\n

Reuters noted in a report<\/a> that with the new cut, the total output reduction amount from OPEC+ will come in at 3.66 million barrels daily, or 3.7% of global oil demand.<\/p>\n\n\n\n

The Financial Times reported<\/a> that oil prices<\/a> had gained 8% immediately after the announcement, noting Saudi Arabia\u2019s share of the cuts would be almost half of the total, at 500,000 bpd.<\/p>\n\n\n\n

Russia, meanwhile, said it would extend the production cuts of 500,000 bpd it announced earlier this year until the end of 2023.<\/p>\n\n\n\n

The FT noted the unusual nature of the announcement as it was made outside the group\u2019s regular monthly meetings, the next of which is taking place today.<\/p>\n\n\n\n

The U.S. administration expectedly criticized the move, saying it was not the time to cut production.<\/p>\n\n\n\n

\u201cWe don\u2019t think cuts are advisable at this moment given market uncertainty \u2014 and we\u2019ve made that clear,\u201d a spokesperson for the National Security Council said<\/a>, as quoted by The Hill.<\/p>\n\n\n\n

\u201cBut we\u2019re focused on prices for American consumers, not barrels, and prices have come down significantly since last year, more than $1.50 per gallon from their peak last summer,\u201d the spokesperson, who was not named in the Hill report, added.<\/p>\n\n\n\n

The move by OPEC+ to curb production further came after the sharp drop in oil prices last month, largely driven by concern about the banking industry after a couple of sizeable bank collapses in the United States.<\/p>\n\n\n\n

The events sparked concern about the stability of the Western banking system, reinforced by the near-death experience of Credit Suisse, and fear of a recession that would affect oil demand.<\/p>\n\n\n\n

“OPEC is taking pre-emptive steps in case of any possible demand reduction,” Energy Aspects\u2019 Amrita Sen told Reuters.<\/p>\n

Updated on