CNBC has reported that oil prices witnessed an 8% increase after the OPEC+ decision to voluntarily decrease oil production for the remainder of the year. 

“The selected involvement of the largest OPEC+ members suggests that adherence to production cuts may be stronger than has been the case in the past,” Vivek Dhar director of the Commonwealth Bank of Australia noted.  

Furthermore, Tina Teng CMC (Currency Management Corporation) said that “OPEC+‘s plan for a further production cut may push oil prices toward the $100 mark again, considering China’s reopening and Russia’s output cuts as a retaliation move against western sanctions”.

According to Wood Mackenzie, China is anticipated to make up 40% of the world’s demand recovery in 2023.

Read more: Oil prices fell sharply after reports of UAE mulling OPEC withdrawal

“They’re looking into the second half of this year and deciding they don’t want to relive 2008,” said Bob McNally, president of Rapidan Energy Group, referring to the massive crash in oil prices from 140$ to 35 back in 2008. 

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Read more: OPEC+ cut down on oil production

Yesterday, the Saudi energy minister announced that the kingdom 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, Oman, and Kazakhstan will be reportedly following suit to voluntarily cut down on oil production.

• KSA will cut down oil production by 500,000 bpd 
• Russia will cut down oil production by 500,000 bpd
• Iraq will cut down oil production by 211,000 bpd
• UAE will cut down oil production by 144,000 bpd
• Algeria will cut down oil production by 48,000 bpd
• Kuwait will cut down oil production by 128,000 bpd
• Oman will cut down oil production by 40,000 bpd
• Kazakhstan will cut down oil production by 78,000 bpd

These cuts are expected to be effective in May and to stay in effect until the end of the year.

Read more: OPEC cuts down production target for fifth time since April

Back in November, citing economic challenges such as high inflation and interest rate increases, OPEC cut its forecast for 2022 global oil demand growth - cutting down next year’s figure as well. 

"The world economy has entered a period of significant uncertainty and rising challenges in the fourth quarter of 2022," OPEC said in November in a report it published following the energy crisis which followed the war in Ukraine. The report also pointed out that oil demand in 2022 will rise by 2.55 million barrels per day, amounting to a 2.6% increase.