OPEC+ potential oil cut just as prices hit range for US to refill SPR
The Iranian foreign minister says the issue will be discussed during the OPEC+ meeting on Sunday with Russia.
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US President Joe Biden during a meeting in the State Dining Room at the White House in Washington, US, October 4, 2022 (Reuters)
Oil production cuts were not discussed during the OPEC meeting in Vienna on Saturday, however, the issue will be discussed in the OPEC+ assembly on Sunday with Russia, Iranian Deputy Oil Minister Amir Hossein Zamani Nia said.
"No, we did not discuss it," he said in a press briefing after the OPEC meeting, adding that cuts were "on the agenda of tomorrow's [OPEC+] meeting."
The Angolan Minister of Mineral Resources, Petroleum, and Gas, Diamantino Azevedo, told reporters that Saturday's meeting only addressed administrative issues.
True to previous decisions
Earlier this week, Russian Deputy Prime Minister Alexander Novak said that the OPEC+ organization will be making the decisions it seems fit for the oil market at the upcoming meeting on Sunday, all while remaining true to previous decisions.
In April, the Saudi energy minister announced that Saudi Arabia will be cutting down oil production at a rate of 500,000 barrels per day until the end of 2023, for the sake of stabilizing the oil market.
Russia reciprocated the decision and announced a downplay of oil production at the same rate. Iraq, UAE, Algeria, Kuwait, and Oman will be reportedly following suit to voluntarily cut down on oil production.
Novak added that Russia will extend its 500,000 barrels per day bpd oil output cut until the end of the year.
Hit the mark
Washington has been planning on replenishing the US Strategic Petroleum Reserve SPR while aiming at lower oil prices during this year if it is "advantageous to taxpayers," US Energy Secretary Jennifer Granholm stated in April.
Biden's administration planned on refilling the reserves when oil prices were between $67-$72 a barrel, which was reached back in March, but as soon as the mark hit the desired price, OPEC+ announced a surprise further production cut, sending prices $5 higher per barrel.
The expected cut comes just after WTI crude oil fell $72 in May, which raised concerns in Washington of further output cuts that would prevent the United States from refilling its SPR within its targeted prices.
