The Organization of the Petroleum Exporting Countries (OPEC) and the allied oil-producing nations, including Russia, reduced their supplies to the global economy by 100,000 barrels a day, making known their unhappiness with crude rates that have sagged due to recession fears.
Monday's decision by energy ministers means the cut for October rolls back the mostly symbolic increase of the same amount in September. The move comes after Saudi Arabia's energy minister's statement last month that the group could reduce output at any time.
Producers of oil such as Saudi Arabia resisted calls from US President Joe Biden to pump more oil to reduce gasoline rates and the burden on consumers.
However, worries about the slumping future demand have helped send down prices from June peaks of more than $120 per barrel, cutting into the windfall for the government budgets of OPEC+ countries, but proving a blessing for drivers in the US as pump prices have eased.
The energy minsters in a statement said that the September increase was only for that month, and that the group could meet again at any time to address market developments.
Meanwhile, a deal between Western countries and Iran to limit Tehran’s nuclear programme could ease sanctions and see over 1 million barrels of Iranian oil return to the market in the coming months. However, tensions between the US and Iran appear to have risen in recent days: Iran seized two US naval drones in the Red Sea, and US, Kuwaiti and Saudi warplanes flew over the Middle East on Sunday in a show of force.
With inputs from AP
First Published: Sept 5, 2022 6:44 PM IST
