International Business: Opec+ output cut ahead of winter sparks inflation fears – Gulf Digital News

International Business: Opec+ output cut ahead of winter sparks inflation fears – Gulf Digital News

Global oil supply is set to tighten, intensifying concerns over soaring inflation after the Opec+ group of nations announced its largest supply cut since 2020 ahead of European Union embargoes on Russian energy.

The move has widened a diplomatic rift between the Saudi-backed bloc and Western nations, which worry higher energy prices will hurt the fragile global economy and hinder efforts to deprive Moscow of oil revenue following Russia’s invasion of Ukraine.

Global crude futures jumped this week, returning to three-week highs, after the Organisation of the Petroleum Exporting Countries and their allies, including Russia, on Wednesday agreed to slash output by 2 million barrels per day just ahead of peak winter season.

This is likely to drive spot prices higher, particularly for Middle East oil, which meets about two-third of Asia’s demand, industry participants said, adding to inflation concerns as governments from Japan to India fight rising costs of living while Europe is expected to burn more oil to replace Russian gas this winter.

Resurgence

“We are concerned about a resurgence in international oil prices, which have shown some signs of calming down since the second quarter,” a spokesperson at SK Energy, South Korea’s largest refiner, told Reuters.

Another South Korean refining source said the