The price of oil has been falling in recent weeks and has already reached a lower level than on the eve of the Russian invasion of Ukraine. A barrel of Brent crude is now trading around $85. This is about 30 percent less than at the beginning of the summer.
The OPEC+ group, which consists of OPEC countries and other “allies” including Russia, plans to cut oil production due to falling oil prices. While previous expectations were in the range of 500,000 to one million barrels per day, it now appears that the oil production cuts will be more drastic. Citing well-informed sources, Reuters reported.
The decision will be made on 5 October
According to these sources, black gold production in the OPEC+ group is expected to fall by more than one million barrels per day. Representatives of the mining powers are due to meet on 5 October to decide on the mining quotas. Probably the biggest question marks will arise over the attitude of Russia, which is highly dependent on oil revenues.
Saudi Arabia pushes for more restrictions on mining
OPEC leader Saudi Arabia, on the other hand, is the very country that will be pushing for greater production cuts. Not only the extent of oil production cuts, but also the cohesion of the OPEC+ group itself may be at stake. It has been tested several times, but never in a situation where Russia needs literally every dollar from its commodity exports.