Deep oil production cuts unexpectedly agreed to by OPEC+ this week are expected to benefit Russia the most while restricting supply to the West, which is already suffering from record energy prices.
After the group drastically cut supplies by 2 million barrels per day, or 2% of the world’s supply; in a market that was already tight, OPEC+ and the West swapped accusations.
Washington criticized the decision as shortsighted and accused OPEC of collaborating with Russia; arguing that the world was already experiencing high energy prices as a result of Russia’s invasion of Ukraine.
Saudi Arabia, the head of OPEC, will have to reduce production by about 0. 5 million real barrels per day, or about $46 million or 1 .4 billion per month, even if it has been pumping in line with the plan. Analysts predicted that the reduction would dramatically tighten the oil markets; particularly if the EU embargo on Russian oil and processed goods goes into effect this year and the following.