OPEC producers have announced an unexpected cut in oil production

That increase contributed to rising inflation, which had a negative impact on the finances of many households. For this reason, last year the United States called for increased production to encourage lower energy and fuel prices.

In response to the announcement, a US National Security Council spokesperson said: “We do not believe cuts will be recommended given the market uncertainty at this time, and we have made that clear.”

Saudi Arabia is cutting production by 500,000 barrels per day, Iraq will drop by about 211,000. The United Arab Emirates, Kuwait, Algeria and Oman will also implement the cuts.

A Saudi energy ministry official said it was a “precautionary measure aimed at supporting the stability of the oil market”.

Analysts expect oil prices to rise, currently hovering around US$80 per barrel.

A PVM firm consultant told Reuters the price could rise to “$3” a ​​barrel, while the head of investment firm Pickering Energy Partners estimated prices could rise to $10.

Analysis by Sameer Hashmi, Middle East Business Correspondent

This surprise announcement is significant for several reasons.

Despite price volatility in recent months, there were concerns that global demand for oil would outstrip supply, particularly at the end of the year.

Analysts expect oil prices to rise after the announcementThis could put more pressure on inflation, worsen the cost-of-living crisis and increase the risk of recession.

Interestingly, the announcement comes a day ahead of a meeting of OPEC and its allies (known as OPEC+). Several member states have given indications that they will maintain a single production policy. Hence, the decision to introduce new cuts has come as a big surprise.

Other members of the board may declare voluntary reductions, and reduce distributions.

The move will further strain US-US relations OPEC+, Led by Saudi Arabia. The White House asked the group to increase supplies at lower prices and curb Russian funding.

The announcement demonstrates close cooperation between oil-producing countries and Russia.

The latest cuts are on top of another one announced by OPEC+ in October last year of two million barrels per day.

The move came despite calls from the United States and other countries for oil producers to pump more crude.

At the time, it was President Joe Biden who said “Disappointed by the short-sighted decision”.

OPEC’s allies include Russia.

Moscow has said it will extend output cuts of half a million barrels a day until the end of the year.

Russia’s aggression against Ukraine in February last year raised energy prices on concerns about oil supplies. International benchmark Brent crude oil prices touched a high of $130 per barrel.

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