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OPEC+ is considering a reduction in its production limit of as much as 2 million barrels a day, although the impact on global supply could be smaller.
The group may discuss a cut of that size, plus smaller reductions ranging from 1 million to 1.5 million barrels a day, when it meets on Wednesday, delegates said. Any curbs would use existing baselines to measure each country’s contribution, one delegate said.
Several members are already pumping far below their officials quotas, meaning they could automatically be in compliance with their new limit without having to curb production. It could still result in the cartel’s largest reduction since the deep cuts agreed at the outset of the Covid-19 pandemic in 2020, but the actual impact on global oil supply could be significantly smaller than the headline number suggests.
A reduction of that size, if it were to be agreed tomorrow at the meeting of the Organization of Petroleum Exporting Countries and its allies in Vienna, would reflect the scale of the producer group’s concern that the global economy is slowing in the face of rapidly tightening monetary policy.
Earlier this year, Brent crude soared above $125 a barrel following Russia’s invasion of Ukraine in February. It’s since dropped, tempering the spectacular windfall enjoyed by Saudi Arabia, Russia, the United Arab Emirates and other major producers.
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