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In break with the West, Opec and Russia to cut oil output


As the EU pushed ahead on Wednesday with an ambitious but untested plan to limit Russia’s oil revenues, Western efforts to drain funding from the President Putin‘s war machine Opec In addition, the group led by Saudi Arabia and that includes Russia. At its meeting in Vienna on Wednesday, OPEC+ agreed to cut oil production sharply, limiting supply in an already tight market, sparking the biggest clashes with West.
Opec’s de facto leader Saudi Arabia has said a production cut of 2 million barrels per day (bpd) – or 2% of global supply – is needed to cope with Western interest rate hikes and the economy weaker global economy. This is the largest reduction since the peak of the Covid pandemic in 2020. The move will reinforce the perception that Russia and Saudi Arabia are working closely together to manage the oil market. However, Saudi Arabia dismissed the criticism, saying that the West is often motivated by “rich arrogance” when it comes to criticizing the group. The move drew swift criticism from the President of the United States Biden, who made a controversial trip to Saudi Arabia in July to lobby to boost oil production. “The President is disappointed by OPEC+’s short-sighted decision,” NSAJake Sullivan and top economic adviser Brian Deese said in a statement.
If global oil prices remain high, it will complicate the EU’s attempt to impose price caps on Russian oil. sanctions against Moscow. Under the plan, a committee consisting of representatives of the EU, G7 countries and other countries that agree to a price cap will regularly decide on the price at which Russian oil should be sold, and it will change based on the price cap. market price.
Diplomats involved in the EU negotiations say Greece, Malta and Cyprus – the maritime nations that will be most affected by the price cap – have received assurances that their business interests they will be protected.
The countries have kept to the eighth package of sanctions that the EU imposed when Russia invaded Ukraine out of concern that price caps on Russian oil exported outside the bloc would affect shipping, insurance and industries. their other business, the diplomats said. For this measure to work and cut revenues for Russia, the US, Europe and their allies will need to convince India and China, which buy significant amounts of Russian oil, to buy only at the already established price. agree. Experts say even with willing partners, the limit can be hard to enforce.

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