Over the course of its meetings, OPEC+ is resisting Western demands to produce more in order to contain the surge in prices.
The countries of the x27;OPEC+ decided on Monday to cut production to support prices in the face of fears of recession, a first in more than a year.
Representatives of the 13 members of the Organization of the Petroleum Exporting Countries (OPEC) and their 10 allies (OPEC+) have agreed to return to August quotas, a cut of 100,000 barrels compared to September, the alliance, headquartered in Vienna, said in a statement.
The group, which met by videoconference, leaves the door open for further discussions before the next meeting on October 5, to respond if necessary to market developments.
During its monthly meetings, OPEC+ is resisting calls from Westerners to open its floodgates more widely in order to contain soaring prices and inflation in the highest for decades.
Buoyed by the news, the prices of the two world crude benchmarks have climbed.
This symbolic drop is not a real surprise after the murmurs of recent weeks, reacted in a note Caroline Bain, analyst at Capital Economics.
The Saudi Minister of Health #x27;Energy, Abdelaziz ben Salmane, had seemed to open the door, ten days ago, to the hypothesis of a cut, denouncing a market fallen into a vicious circle of low liquidity and volatility extreme.
Affected by an increasingly gloomy global economic outlook, prices had recorded their third consecutive monthly decline in August, far from their peaks at levels close to 140 dollars per barrel.
Better a halt now. Better to be too cautious, says Bjarne Schieldrop, analyst at Seb, to explain the decision of OPEC+.
The alliance clearly wants to maintain the high prices that it provide lucrative recipes, adds Craig Erlam, analyst at Oanda.
In addition, it may fear that the return of Iranian crude to the market will tip the market balance in favor of supply and therefore lower prices, he adds.
Hopes for an agreement, which would come with an easing of American sanctions, notably on oil, have recently been revived.
Before a new cold shower in these interminable talks: the United States considered on Thursday that Tehran's response to the text submitted by the European Union was unfortunately […] not constructive.
Another element to consider is the inability of OPEC+ to achieve its objectives.
“Current production and quotas are now disconnected, so it is a question of credibility.
—Bjarne Schieldrop, Analyst at Seb
Political crises or lack of investment and maintenance during the pandemic now crippling the oil infrastructure: many countries in the group such as Angola or Nigeria cannot pump more, already appearing at maximum capacity .
Only Saudi Arabia and the United Arab Emirates seem to have spare production capacity.
This is also a new message addressed to Westerners, who are trying at all costs to stem inflation.
Last announcement to date, the seven most industrialized countries have decided, on Friday, to urgently cap the price of Russian oil in order to limit the resources that Moscow derives from the sale of hydrocarbons.
But Russia has warned that it will not would sell more oil to countries adopting this unique mechanism.
The supply on the market could then be reduced, which co would contribute to a new surge in prices which, despite the recent decline, remain historically high and extremely volatile.