Saudi-led OPEC turns deaf ears on oil cuts amid global slowdown

Saudi-led OPEC turns deaf ears on oil cuts amid global slowdown

The International Energy Agency (IEA) warned the Organization of the Petroleum Exporting Countries (OPEC) and its allies on Wednesday to stop cutting oil production so that oil prices do not burden global economic growth and further drive inflation. 

The Paris-based organization urged the international community to shift away from fossil fuels and transition towards renewable energy. Transitioning too quickly away from fossil fuels could itself lead to inflation, according to one London-based executive. 

"We have already seen that when you just switch off fossil energy and move to a transition energy that you will have a high increase in oil prices, which leads to inflation as well," Naeem Aslam, chief investment officer at Zaye Capital Markets, told Al-Monitor. 

The Gulf region is remaining defiant, however, and could fare better economically than other parts of the world in 2023. 

The IEA warning followed the Saudi-led OPEC+ alliance deciding earlier this month to cut oil production by 1.66 million barrels per day from May until the end of 2023. The announcement came as somewhat of a surprise, and oil prices rose above $80 a barrel in response. Prices had been as low as $70 a barrel in March. 

OPEC responded defiantly to the IEA. Haitham Al Ghais,