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

Move Will Hit EU's Plan To Put A Price Cap On Russian Oil

As the EU pushed ahead on Wednesday with an ambitious but untested plan to limit Russia's oil revenue, Western efforts to drain funding from President Putin's war machine were facing a hurdle from Opec Plus, the group led by Saudi Arabia and that includes Russia. At a meeting in Vienna on Wednesday, OPEC+ agreed to steep oil production cuts, curbing supply in an already tight market, causing one of its biggest clashes with the West.

Opec's de-facto leader Saudi Arabia said the cut of 2 million barrels per day (bpd) of output equal to 2% of global supply was necessary to respond to rising interest rates in the West and a weaker global economy. It is the biggest cut since the height of the Covid pandemic in 2020. The move would reinforce the perception that Russia and Saudi Arabia are working closely together to manage oil markets. However, Saudi Arabia rebuffed criticism, saying the West was often driven by "wealth arrogance" when criticising the group.

The move drew a swift rebuke from US President Biden, who had made a controversial trip to Saudi Arabia in July in part to lobby for a boost in oil production. "The president is disappointed by the shortsighted decision by OPEC+," NSA Jake Sullivan and top economic advisor Brian Deese said in a statement.