OPEC and Russia cut oil supplies by 100,000 barrels a day

The OPEC+ alliance, led by Saudi Arabia and Russia, agreed on Monday to reduce the official oil supply of this group of 23 countries by 100,000 barrels a day as of 1 October, due to fears that a slowdown in the world economy will reduce demand for "black gold".

With this decision, sanctioned by the ministers of the OPEC+ sector at their monthly teleconference, the increase in pumping that had been adopted at the previous meeting, on 3 August, for the month of September, was cancelled.

The ministers agreed to "return to the August 2022 production level", recalling that "the upward adjustment of 0.1 million barrels per day (mbd) was only planned for September", the Organisation of the Petroleum Exporting Countries (OPEC) said in a statement.

They also called, in their final statement, for consideration to be given to convening a new OPEC+ ministerial meeting "at any time to address market developments, if necessary", which could take place before the next regular, monthly meeting, scheduled for 5 October.

In their final statement, they stressed that the decision was taken after reviewing "the current fundamentals of the oil market" and noting the "consensus on its outlook", although without specifying what this would be.

However, the raising of the possibility of a new meeting at any time, instead of convening the next regular meeting, as they have usually done so far, reveals a certain insecurity and uncertainty regarding the evolution of the oil market in the short term.

The withdrawal of the supply increase promised a month ago, following US President Joe Biden's historic trip to Saudi Arabia to call on OPEC to open the taps - in order to make crude cheaper and reduce inflation - comes at a time of high tension in energy markets.

Particularly difficult is the situation facing Europe after Moscow decided on Friday to suspend gas supplies through Nord Stream 1 indefinitely and threatened to cut off all sales of oil and oil products to the European Union (EU) if the G7 powers impose a ceiling on the price of Russian crude.

In its brief final note, OPEC+ does not explain the reasons for its decision, but it appears that it fears that a slowdown in the economy will cause oil demand and "petro-prices" to fall.

This factor had been putting downward pressure on the price of oil, which had lost more than 20% since peaking at $120 in June.

But the expectation that OPEC+ would reduce its pumping, as it finally did, reversed the trend.

Ahead of the outcome of the conference call, Brent crude oil was up 2.3 % to $95.2 a barrel.