• Oil & Gas - News
  • Updated: October 19, 2022

OPEC Makes Unanimous Consensus To Reduce Oil Production

OPEC Makes Unanimous Consensus To Reduce Oil Production

The Federal Government on Tuesday released a statement that the Organisation of Petroleum Exporting Countries (OPEC)' decision to reduce crude oil production by two million barrels was unanimous.

It stated that there was no hidden agenda and that the action was made to stabilise the market.

This was revealed in a statement that Chief Timipre Sylva, the Minister of State for Petroleum Resources, personally signed.

“The decision taken by the OPEC+ (meaning OPEC and its allies) during our meeting on October 5, 2022, to voluntarily adjust crude oil production downward by two million barrels per day was unanimous.

“It was taken for the exclusive purpose of ensuring the long-term stability of the oil market.

"It was purely to balance supply and demand and forestall the degeneration of the current volatile oil market to a situation where larger production cuts will be required to balance it.

“This proactive decision was based on a thorough assessment of market conditions as OPEC plus has always been guided.”

Members of OPEC and their allies under the leadership of Russia had earlier this month agreed on a significant reduction in oil production, a move to support prices that might help Moscow, which is suffering from sanctions, and irritate Washington.

Nigeria is an influential OPEC member, pumping more than 1.4 million barrels of crude daily, however, this number has dropped due to the operations of oil thieves and vandals in the Niger Delta.

At a summit in Vienna, the 13-nation OPEC cartel and its 10 allies under the leadership of Russia decided to cut two million barrels per day starting in November.

Since the peak of the COVID-19 epidemic in 2020, this is the largest reduction.

Such action may spike crude prices, escalating inflation that has already hit decades-high levels in several nations and is causing the global economy to slow down.

Additionally, it might help Russia gain momentum before the European Union bans the majority of its crude shipments later this year and the Group of Seven affluent democracies attempts to control the price of oil in that nation.

In July, US President Joe Biden personally urged Saudi Arabia's rulers to increase output in an effort to lower prices that had risen since Russia's invasion of Ukraine earlier in the year.

But due to worries about declining demand and anticipation of a potential global recession, crude prices have plummeted recently.

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