OPEC and its allies are discussing deepening oil production cuts, possibly by as much as 1 million barrels per day, according to Reuters as oil prices fell towards $70 per barrel and market analysts spoke of a new supply glut.
OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies such as Russia, pumps around 40% of the world’s crude, meaning its policy decisions can have a major impact on oil prices.
According to Reuters, cuts could amount to 1 million bpd on top of existing cuts of 2 million bpd and voluntary cuts of 1.6 million bpd that was announced in April.
If approved, it would take the total volume of reductions to 4.66 million bpd, or around 4.5% of global demand.
Western nations have accused OPEC of manipulating oil prices and undermining the global economy through high energy costs.
In return, OPEC officials and insiders have said the West’s money-printing over the last decade has driven inflation and forced oil-producing nations to act to maintain the value of their main export.
The International Energy Agency expects global oil demand to rise further in the second half of 2023, potentially boosting oil prices.