LONDON/DUBAI (Reuters) – OPEC+ agreed to stick to oil production targets at a meeting on Sunday as oil markets struggle to assess the impact on demand of a slowing Chinese economy and the G7’s cap on Russian oil on supply. .
The decision comes two days after the Group of Seven agreed on a ceiling for Russian oil prices.
OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, angered the United States and other Western nations in October when it agreed to cut output by 2 million barrels per day, about 2% of the world. From November until the end of 2023.
Washington accused the group and one of its leaders, Saudi Arabia, of siding with Russia, despite Moscow’s war in Ukraine.
OPEC+ said it had cut production due to the weaker economic outlook. Oil prices have slumped since October due to slowing Chinese and global growth and rising interest rates, which has fueled market speculation that the group may cut production again.
But the group of oil producers decided on Sunday to keep the policy unchanged. Its key ministers are scheduled to meet on February 1 for a monitoring committee, while a full meeting is scheduled for June 3 and 4.
The Group of Seven nations and Australia agreed on Friday to cap the price of a barrel of Russian seaborne crude oil at $60, a move to deprive President Vladimir Putin of revenue while keeping Russian oil flowing to global markets.
Moscow said it would not sell its oil under the ceiling and was analyzing how to respond.
Several analysts and OPEC ministers have said the price cap is confusing and possibly ineffective because Moscow sells most of its oil to countries like China and India, which have refused to condemn the war in Ukraine.
Neither the OPEC meeting on Saturday nor the OPEC+ meeting on Sunday discussed the Russian price cap, sources said.
Russian Deputy Prime Minister Alexander Novak said on Sunday that Russia would prefer production cuts to oil supplies under price caps, and said the cap could affect other producers.
Sources told Reuters that several OPEC+ members have expressed frustration with the cap, saying the anti-market measure could eventually be used by the West against any producer.
The United States said the measure did not target OPEC.
JPMorgan said on Friday that OPEC+ may revise production in the new year based on new data on Chinese demand trends, consumer compliance with Russian crude production price caps and tanker flows.
(Covering) Maha El Dahan and Rowena Edwards; Editing by Kirsten Donovan
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