Saudi Arabia is the only member of OPEC+It was able to respond rapidly to excess supply that weakened the market in the early stages of the pandemic in 2020 when the group of producers implemented record output cuts.OPEC+ has in place cuts of 3.66 million bpd, amounting to 3.6% of global demand, including 2 million bpd agreed last year and voluntary cuts of 1.66 million bpd agreed in April.
In response, OPEC insiders have said the West’s money-printing over the last decade has driven inflation and forced oil-producing nations to act to maintain the value of their main export. Veteran OPEC watcher and founder of Black Gold Investors Gary Ross said, “The Saudis have made good on their threats to speculators and they clearly want higher oil prices.”
In addition to extending the existing OPEC+ cuts of 3.66 million bpd, the group also agreed on Sunday to reduce overall production targets from January 2024 by a further 1.4 million bpd versus current targets to a combined 40.46 million bpd.