OPEC+ may further cut oil production following Russian price cap

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Major oil producers will adhere to their current output strategy and even cut down oil production further in their coming meeting on Sunday amid falling oil prices, a coming Russian oil price cap, and sanctions.

The last time OPEC convened in October, a decision spearheaded by Saudi Arabia and Russia cut oil production by 2 million barrels per day starting November. 

The OPEC+ oil production reduction is the most substantial cut since the COVID-19 pandemic peak in 2020. 

EU and Australia, in addition to G7 countries, also appeared close to agreeing on $60 dollar-a-barrel price cap for Russian oil on Thursday.

An Iranian source told AFP on Thursday that OPEC should vote for a "rollover of the previous decision" to cut 2 million barrels per day, contending that the market is "very uncertain" due to European sanctions on Russian energy.

Read next: US re-evaluating ties with KSA following OPEC+ decision: WH

In November, OPEC wrote in a report that "the world economy has entered a period of significant uncertainty and rising challenges in the fourth quarter of 2022.

"Downside risks include high inflation, monetary tightening by major central banks, high sovereign debt levels in many regions, tightening labor markets, and persisting supply chain constraints."

This report came before OPEC+ are set to convene on December 4 to set policies on their agenda.

The US is concerned that OPEC's probable decision to reduce oil production will pose serious problems for the country and may even be interpreted as a hostile act, according to a US Treasury report. The Biden administration assembled its top energy, economic, and foreign policy officials and entrusted them with lobbying Middle East allies, such as Saudi Arabia, the United Arab Emirates, and Kuwait to vote against decreasing oil production.