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The price of crude oil increased by 5 to 8 percent by type almost overnight. This is how Asian markets reacted to the surprising news on Monday morning.
Accordingly, Saudi Arabia and other members of the “Opec+” group announced that they will cut oil production by more than one million barrels a day as of May. The example of Saudi Arabia is followed by Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Oman and Algeria. Production cuts in Russia will continue until the end of 2023.
In fact, OPEC (Organization of the Petroleum Exporting Countries) does not want to discuss the restriction until Monday. OPEC+ includes OPEC members Saudi Arabia, Equatorial Guinea, Algeria, Angola, Gabon, Iran, Iraq, Congo, Kuwait, Libya, Nigeria, Venezuela and the United Arab Emirates, as well as Russia, Kazakhstan, Mexico “countries they face”. also includes. and Oman.
However, Saudi Arabia took the lead. The Saudi Energy Ministry said it was a “voluntary cut” to stabilize the oil market.
The higher price hasn’t hit the pump yet – so it’s worth topping up now.
Support falling prices
Opec countries want to raise oil prices, which have been falling for a long time. Especially in March, after the problems in the banking sector, oil demand and thus price problems, the oil price fell to the lowest level in 15 months.
The now resurgent oil price is likely to re-intensify the inflationary pressure around the world. This is inconvenient for consumers and should force central banks to keep interest rates higher for longer.
But that’s not the only problem: Just last week, the Chinese-led Asian security and economic bloc, which includes Saudi Arabia, Russia and the former Soviet states, sided with the SCO (Shanghai Cooperation Organization). The United States finds this rapprochement between the Gulf States and the Sino-Russian-dominated SCO anything but good. Saudi Arabia has also significantly strengthened its energy ties with China.
Saudi Arabia also depends on high oil prices to finance Crown Prince Mohammed Bin Salman’s (37) billion-euro program of economic transformation, “Vision 2030”.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
