Oil production to fall
OPEC+ settles dispute over production volume
06/04/2023, 7:49 p.m
The oil price, which has been falling for months, is a thorn in the side of Saudi Arabia in particular. The kingdom therefore wants to reduce the supply on the oil market. Russia, on the other hand, sees no need for action and exports far below the current market price. In tough negotiations, the OPEC+ members settle their dispute.
According to its own statements, the oil cartel OPEC+ wants to produce around 40 million barrels (159 liters each) a day in the coming year. According to calculations by the Russian agency Tass, this means a reduction in total OPEC+ production by 1.39 million barrels per day. The alliance of 23 countries made this decision in Vienna. It was preceded by hours of tough negotiations. Saudi Arabia bears the brunt of the additional funding cut.
The positions of the countries organized in OPEC+ were far apart. In the run-up, Saudi Arabia in particular had fueled speculation that a decision on a further production limit could be made. In view of the oil price, which has been falling for months, Saudi Arabia pleaded for a significant reduction in supply. Russia, on the other hand, had signaled that there was no additional need for action. Other OPEC members criticized the fact that Russia, in view of Western sanctions, was thwarting efforts to stabilize prices by offering oil at lower prices.
In April, a production cut of 1.66 million barrels (each 159 liters) per day until the end of the year was decided to stabilize the oil price. Apart from a brief spike in April, oil prices have been falling for around a year. In mid-2022, a barrel of OPEC oil cost around $115; it is currently around $75. Verbund had already reacted to this development in October 2022 and decided to cut production by two million barrels a day. Allianz has a global market share of around 40 percent.