OPEC+ members endorse output cuts after US coercion claim

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An OPEC flag is seen on the day of OPEC+ meeting in Vienna in Vienna, Austria October 5, 2022. REUTERS/Lisa Leutner/File Photo

The White House, escalating its war of words with Saudi Arabia, accused Riyadh of pressuring other nations into supporting the production cut this month. On Sunday, OPEC+ member states lined up to endorse the production cut after the White House accused Riyadh of pressuring other nations into supporting the move.

The United States observed on Thursday that the reduction would increase Russia's foreign profits and speculated that it was orchestrated for political reasons by Saudi Arabia, which on Sunday denied aiding Moscow's invasion of Ukraine.

King Salman bin Abdulaziz of Saudi Arabia stated that the country was working hard to support stability and equilibrium in oil markets, particularly by forming and upholding the OPEC+ alliance agreement.

Prince Khalid bin Salman, the kingdom's defense minister and the son of King Salman, stated that the Oct. 5 decision to restrict output by 2 million barrels per day despite tight oil markets was consensual and based on economic considerations.

The ministers of other OPEC+ member states, including the United Arab Emirates, supported his statements.

Suhail al-Mazrouei, the energy minister of the Gulf state, remarked on Twitter, "I would like to clarify that the latest OPEC+ decision, which was unanimously approved, was a pure technical decision, with NO political intentions whatsoever."

His remark followed a statement from the Iraqi government's oil marketer, SOMO.

"There is complete consensus among OPEC+ countries that the best approach in dealing with the oil market conditions during the current period of uncertainty and lack of clarity is a pre-emptive approach that supports market stability and provides the guidance needed for the future," SOMO said in a statement.

According to KUNA, the CEO of the Kuwait Petroleum Corporation, Nawaf Saud al-Sabah, applauded the decision by OPEC+ - which includes other significant producers, particularly Russia - and stated that the country was eager to preserve a balanced oil market.

Oman and Bahrain issued separate announcements indicating that OPEC had unanimously agreed on the cut.

Algeria's Ennahar TV stated that both the Algerian energy minister and the visiting OPEC secretary general, Haitham Al Ghais, expressed full confidence in the decision.

Later, Ghais stated during a press conference that the organization's objective was not a certain price but rather a balance between supply and demand.

When OPEC has reduced output in the past, oil inventories in key economies have been lower.

According to some analysts, the recent volatility in oil markets could be mitigated by a reduction that would entice investors to an underperforming market.

John Kirby, the spokesman for the U.S. National Security Council, stated on Thursday that "more than one" OPEC member felt coerced by Saudi Arabia into voting for the cut, adding that the cut would also increase Russia's revenues and reduce the effectiveness of sanctions imposed for its invasion of Ukraine in February.

In a presentation to the kingdom's advisory Shura Council, King Salman described Saudi Arabia as a peacemaker and praised the crown prince's decision to release Russian POWs last month, according to state news agency SPA.

Khalid bin Salman stated on Sunday that he was "astonished" by reports that Saudi Arabia supported Russia in its conflict with Ukraine.

"It is telling that these false accusations did not come from the Ukrainian government," he tweeted.

Publish : 2022-10-17 12:15:00

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