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OPEC+ Cuts Oil Production

The Organization of the Petroleum Exporting Countries and its Russia-led allies reached an agreement Wednesday to cut oil production by 2 million barrels a day, according to The Wall Street Journal (subscription).

What oil analysts are saying: “The oil-production cut is the biggest from the group collectively known as OPEC+ since April 2020, signaling its intent to keep prices high after enduring seven years of a relatively subdued market…”

What we’re saying: “This announcement from OPEC underscores the need to increase domestic production—strengthening our energy security and infrastructure. It’s time to enact a policy agenda that will boost U.S. competitiveness and support our allies,” said NAM President and CEO Jay Timmons.

  • The U.S. is the world’s leading energy producer, creating an advantage for manufacturers in the global marketplace. The NAM’s comprehensive policy agenda, “Competing to Win,” outlines how policymakers can move forward as the global energy market faces new challenges.

Bottom line: Two million barrels of oil constitutes about 2% of the global daily oil production, but the impact on daily oil sales might not be so large.

  • “OPEC+ cut its crude-oil output targets from 43.8 million barrels a day to 41.8 million barrels a day, but the group has been undershooting its targets by as much as 3 million barrels a day this year.”
  • “‘The actual hit to oil supply will be much smaller,’ said Capital Economics in a note, predicting that Brent crude prices will end the year at $100 a barrel.”
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