Page 7 - NorthAmOil Week 49 2022

NorthAmOil POLICY NorthAmOil

Russian oil cap but OPEC+ keeps to its policy

GLOBAL IN early December, the focus was on falls in output by 2mn barrels per day (bpd), about 2%
OPEC oil output following the steps taken by the of world demand, from November until the end
cartel to meet pledged cuts throughout the mar- of 2023. There were accusations from Washing-
ket. A week later, the situation is not materially ton that the group and, specifically, one of its
different but there have been subtle variations. leaders, Saudi Arabia, was siding with Russia in
The week’s developments included the Group spite of Moscow’s war in Ukraine. OPEC+ had
of Seven (G7) countries setting a price cap on OPEC+ argued it had cut output because of
Russian oil. a weaker economic outlook. Oil prices have angered the
The G7 countries and Australia agreed a $60 declined since October due to slower Chinese
per barrel price cap on Russian seaborne crude and global growth and higher interest rates, US and other
oil in a move to deprive Russian President prompting speculation the group could cut
Vladimir Putin of revenue while still keeping output again. Western countries
Russian oil flowing to global markets. Moscow in October when
said it would not sell its oil under the cap and Kuwait comments
was analysing how to respond. OPEC+’s decisions are based on oil market it agreed to cut
Many analysts and OPEC ministers have data and ensure the market’s stability, Kuwait’s
said the price cap is confusing and probably oil ministry said in a statement on state news output.
inefficient, as Moscow has been selling most agency KUNA, following a meeting where the
of its oil to countries such as China and India, group decided to continue its existing policy. The
which have refused to condemn the war in impact of slow global economic growth, soaring
Ukraine. inflation and high interest rates on oil demand
Then, at their latest meeting – on December 4 are a cause for “continuous caution”, Kuwaiti Oil
– OPEC+ agreed to stick to its oil output targets Minister Bader al Mulla said.
as the oil markets struggle to assess the impact of Following the December 4 decision, the pol-
a slowing Chinese economy on demand and the icy has remained unchanged. OPEC’s ministers
G7 price cap on Russian oil on supply. will next meet on February 1 for a monitoring
OPEC+ had angered the US and other West- committee, with a full meeting scheduled for
ern countries in October when it agreed to cut June 3-4.™

Week 49 08•December•2022 www. NEWSBASE .com P7