The oil producing countries have decided to cut production to reduce volatility in the global oil market.
Deputy Prime Minister Alexander Novak co-chaired the 32nd OPEC and non-OPEC Ministerial Meeting. Various forecasts for developments in the oil market until the end of 2022 were made as part of the consultations, and the fulfilment of the obligations previously taken by these countries to maintain stability in the oil market in July, was considered. The meeting took place via videoconference.
Following the meeting, the largest oil producing countries decided unanimously to reduce the growth in total daily production of oil in October 2022 by 0.1 million barrels. Following the meeting, Alexander Novak said the adjustment in oil production growth back to decline was due to macroeconomic factors in the global economy and increasing uncertainties in the oil market.
“We see that global economic growth forecasts have been adjusted. In addition, there are still many uncertainties in the market, including the initiative to set the margin price for Russian oil, which affects the situation. We have a fairly flexible tool that can be used to increase or decrease production. We take a rational approach to balancing the market,” the Deputy Prime Minister said.
According to Alexander Novak, global demand for oil, however, continues to recover relative to pre-pandemic levels.
“At the beginning of next year, we expect that we will reach a level of over 100 million barrels of daily demand,” Alexander Novak said.
The next, 33rd OPEC+ ministerial meeting is scheduled for 5 October 2022.