Page 9 - FSUOGM Week 49 2022

FSUOGM POLICY FSUOGM

Russian oil cap but OPEC+

keeps to its policy

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

Week 49 12•December•2022 www. NEWSBASE .com P9