July 21, 2024

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OPEC+ members line up to support production cuts after US coercion calls

OPEC+ members line up to support production cuts after US coercion calls
  • The United States claimed that more than one country in OPEC was forced to cut
  • Iraq and Kuwait, other members of OPEC+, stand by the decision
  • Saudi Defense Minister says the decision was purely economic

CAIRO (Reuters) – OPEC+ members lined up on Sunday to agree to a sharp production cut agreed this month after the White House, in escalating its war of words with Riyadh, alleged that Saudi Arabia had forced some other countries to support the move.

Washington indicated on Thursday that the cut would boost Russia’s foreign profits, and indicated that it was prepared by Riyadh for political reasons, which on Sunday vehemently denied that it supports Moscow in its war with Ukraine.

Saudi Defense Minister Prince Khalid bin Salman also said the Oct. 5 decision to cut production by 2 million barrels per day – taken despite tight oil markets – was unanimous and based on economic factors.

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Iraq, the second largest exporter in the Organization of Petroleum Exporting Countries (OPEC), echoed his statements and several other producing countries.

“There is complete consensus among the OPEC + countries that the best approach in dealing with the oil market conditions during the current period of uncertainty and uncertainty is a proactive approach that supports market stability and provides the required guidance for the future.” State oil marketing company SOMO said in a statement.

The Kuwait News Agency (KUNA) reported that the CEO of the Kuwait Petroleum Corporation, Nawaf Saud Al-Sabah, also welcomed the decision of OPEC +, which includes other major producers, especially Russia, and said that his country is keen to maintain a balance in oil markets.

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Oman and Bahrain said in separate statements that OPEC had unanimously agreed to the cut.

Algeria’s Energy Minister described the October 5 decision as “historic” and he and OPEC Secretary-General Haitham Al-Ghais, who is visiting Algeria, expressed their full confidence in it, Algeria’s An-Nahar TV reported.

Guess later said at a press conference that the organization aims to achieve a balance between supply and demand, not a specific price.

Oil stocks in major economies are at lower levels than when OPEC cut production in the past.

But some analysts said the recent volatility in the crude markets could be remedied with a cut that would help lure investors into an underperforming market.

US National Security Council spokesman John Kirby said Thursday that “more than one member” of OPEC felt Saudi Arabia was being forced to participate in the vote, adding that the cut would also increase Russia’s revenue and reduce the effectiveness of sanctions imposed over its invasion of Ukraine.

On Sunday, Khalid bin Salman said he was “surprised” by allegations that his country “stands with Russia in its war with Ukraine.”

“Obviously these false accusations did not come from the Ukrainian government,” the king’s youngest son wrote on Twitter.

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(Covering by Moataz Muhammad, Yasmine Hussein, and Maha Al-Dahan). Additional reporting by Nair Abdullah and Ahmed Tolba. Editing by Louise Heavens, Alexandra Hudson

Our criteria: Thomson Reuters Trust Principles.