OPEC Plus Cuts Oil Output
OPEC Plus, a coalition of 13 original members of Organization of Petroleum Exporting Countries (OPEC) and 10 allied non-members, announced to cut 1.2 million barrels per day from world oil production. Immediately the announcement was made, crude oil price jumped up by 7 percent. The move was aimed at increasing oil prices which had dropped significantly from the time Russia invaded Ukraine in February 2022.
Despite hinting that there was no immediate plan to increase global oil price through cut in production, the sudden announcement might not be in connection with the anticipation of a recession in the latter quarters of the year. It is strongly believed that both American and European banks are not doing enough to reduce inflation, which in the long run would reverberate to the mostly fragile economies of OPEC Plus members.
The cut in production is putting non-aligned oil producers such as Brazil, Canada, Norway and the United States to ramp up productions.