OPEC Plus member countries cut oil production, US stockpiles fall

Tags: International News

Representatives of OPEC Plus member countries met in Vienna on 5 October after two and a half years in which the member countries agreed to cut the amount of oil production by two million barrels per day.

Important facts

• This decision to cut production will come into effect from November.

• The US has criticized the cut in oil production quotas by the Organization of the Petroleum Exporting Countries (OPEC) and its allies.

• This move of OPEC will have the most negative impact on low and middle income countries.

• Earlier, OPEC countries had made a symbolic cut in production last month.

Why is OPEC Plus slashing production?

• Oil prices skyrocketed after Russia's invasion of Ukraine.

• The recent cut is the biggest since 2020 when OPEC Plus members cut production by 10 million bpd during the COVID-19 pandemic.

• This cut will boost oil prices and will be extremely beneficial for Middle Eastern member states.

• This will reduce oil demand in a faltering global economy and the cuts will increase profits.

About OPEC

• It is a permanent, intergovernmental organisation that was established in 1960 at the Baghdad Conference by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.

• The purpose of this organisation is to coordinate and integrate the petroleum policies of its member countries and to ensure the stabilisation of oil markets to ensure efficient, economic and regular supply of petroleum to the consumer.

• Headquarters - Vienna (Austria)

• OPEC has 14 member states (Iran, Iraq, Kuwait, United Arab Emirates, Saudi Arabia, Algeria, Libya, Nigeria, Gabon, Equatorial Guinea, Republic of the Congo, Angola, Ecuador and Venezuela).

OPEC plus

• It is a coalition of OPEC members and the world's 10 major non-OPEC oil exporting countries.

• Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan.