Geopolitics, Not Just Greed, Drive OPEC+’s Announcement To Cut Oil Production

Geopolitics, Not Just Greed, Drive OPEC+’s Announcement To Cut Oil Production

Share to Linkedin Delegates during a news conference following the 33rd meeting of the Organization of Petroleum ... [+] Exporting Countries (OPEC) and non-OPEC countries in Vienna, Austria, on Wednesday, Oct. 5, 2022. OPEC+ agreed to cut its collective output limit by 2 million barrels day as it seeks to halt a slide in oil prices caused by the weakening global economy. Photographer: Akos Stiller/Bloomberg OPEC+'s announcement that they have agreed to cut oil production by 2 million barrels per day has sent shockwaves throughout global markets. This cut, equaling approximately 2% of the global supply, will undoubtedly push up oil prices and worsen inflation. In reality, the cut may be about 1 mbd as OPEC failed to meet previous its targets due to sanctions against Russia and other suppliers underperforming. Still, the cut failed to push the oil futures above $100 as of publication. OPEC+ claimed the step was "…necessary to respond to rising interest rates in the West and a weaker global economy." While inflation is still high and recession is staring everyone in the face, this move would exacerbate the economic downturn, as high oil prices serve as a de-facto tax on the economy. In fact, the