Replica of an oil pump with the OPEC logo in the background. Given by Ruvic (Portal)
The oil cartel will extend its production cuts for another three months to artificially support the price of crude oil. OPEC+, the expanded version of the Organization of the Petroleum Exporting Countries, agreed on Sunday to continue those production cuts until June 30. So far, this agreed exit was only valid until March 31st.
The current joint cut by this group of countries, led by Saudi Arabia and Russia (second and third largest crude oil producers in the world after the United States), dates back to the fall of 2022 and represents the withdrawal of 2.2 million from the world barrel market daily.
OPEC+ has been cutting supply for years, a policy that doubled during the pandemic as global oil consumption collapsed. Without these voluntary withdrawals, which have provoked the response of several major consumers, the oil market would be even more flooded – with supply still solid, particularly from non-OPEC countries such as the United States, Canada and Guyana, and a demand still there didn't get going – and prices have fallen noticeably.
Brent crude, the benchmark in Europe, is trading at around $83 a barrel today, a far cry from the $120 it hit at the start of Russia's invasion of Ukraine but at levels comfortable for most major oil companies.
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