[ICYMI] How Russia will benefit from fresh oil production cuts
The shock announcement by several OPEC+ members to voluntarily cut their oil production by more than a million barrels per day from May has sent world oil prices soaring, in a move widely seen as the tightening of the bond between Russia and Saudi Arabia.
Unlike two previous cuts, several members preferred to act independently on Sunday, without going through the formal framework of the alliance that requires the agreement of the 13 countries of the OPEC cartel and its 11 partners . To form the OPEC+ alliance, the organisation in 2016 included non-OPEC oil-producing countries led by Russia.
The cuts"will tighten up the oil market and thus help Russia to secure better prices for the crude oil it sells", he added. The consequences of Sunday's decision are all the greater because, unlike the cuts previously made by the group at the height of the pandemic or last October,"the momentum for global oil demand is up, not down" with a strong recovery of China expected, said Innes.
For Finalto analyst Neil Wilson, they also signal a new era, in which"the Saudis are not afraid of the US" as OPEC"leverage" is on Riyadh's side.
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