Potential Reduction of One Million Barrels of Oil Per Day by OPEC+

Members of OPEC and its allies, OPEC+, began a two-day meeting in Vienna on Saturday, June 3, which may lead to a further production cut of up to "one million barrels" per day. This action is being considered due to "falling oil prices and the likelihood of the market facing an oversupply." Sources within OPEC+ told Reuters that this production cut could be one million barrels per day, exceeding the previous cuts of over 2 million barrels and the 1.6 million barrels voluntarily announced in a surprising move in April and implemented in May. If approved, the total production cut would reach 4.66 million barrels per day, or about 4.5% of global demand. Hayan Abdul-Ghani, Iraq's oil minister, previously stated in response to a question about the potential one million barrel cut, "We have not yet reached that topic, and talking about that figure is premature." Production cuts typically take effect one month after an agreement, but ministers can also agree to subsequent implementations. Western countries have accused OPEC of manipulating oil prices and undermining the global economy through high energy costs. They also accuse OPEC of excessively supporting Moscow despite Western sanctions due to Russia's invasion of Ukraine. OPEC+, which consists of the Organization of the Petroleum Exporting Countries and its allies like Russia, supplies "about 40%" of the world's crude oil, meaning that this group's decisions on production levels significantly impact oil prices. The rise in oil prices in global markets follows the production cuts by OPEC+. The Tehran Stock Exchange continues to see declines; the government faces a "serious constraint" in budget provision. A research report indicates that "cheap oil" is the reason for China's support of the Iranian regime. Russia's oil exports have increased; Putin's government budget deficit has reached $29 billion. OPEC+'s "surprising" decision: daily oil production will decrease.