Fears grow over oil price as Opec+ agrees to cut output
The Opec oil cartel and its allies have agreed to a significant cut in oil production targets despite significant pressure from the US.
The Opec+ group of oil-producing nations signed up to a cut in output of 2m barrels a day, squeezing supplies in a tight market.
Joe Biden’s administration had hoped to persuade Middle Eastern nations not to curb supplies, which could further stoke fuel prices and add to soaring inflation.
Founded in 1960, the cartel of the world’s biggest oil producers emerged as a political and economic force with the 1973-74 US oil embargo, which caused oil prices to spike. The club consists of 13 countries, with Saudi Arabia the biggest producer, followed by Iraq and Iran.
In response to the 2014-16 oil price slump, Opec partnered with Russia in December 2016 to agree a cut in production of 1.8m barrels a day. That curb, the first of its kind in 15 years, drove up the price of oil. In May 2017, the cuts were extended until the end of March 2018. Opec's official members are: Algeria, Angola, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Republic of the Congo, Saudi Arabia, the United Arab Emirates and Venezuela. Indonesia and Qatar's membership has lapsed.
The Opec+ group, sometimes known as ‘Vienna Group’, adds 10 non-member nations, including Russia, Mexico and Kazakhstan. Between them these nations supply 55 percent of oil production and hold 90 percent of the planet's oil reserves.
Oil prices have fallen from the highs of about $130 a barrel seen in the summer when Russia’s invasion of Ukraine tightened supplies.
Motorists in the UK and the US have experienced high prices at the pump as a result, exacerbating the cost of living crisis.
OPEC+has in recent months failed to achieve
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