OPEC, Russia Align on Oil Production Cut

by Tim Healey

Published: October 5th, 2022

Saudi Arabia and Russia have agreed to cut oil production in a bid to drive prices higher.

The two countries are the leaders of the OPEC Plus consortium, and the planned cuts are the biggest in over two years.

It's a counter-offensive to the American and European bids to generate lower gas prices at the pump and stop Russia from profiting from crude oil in the wake of its invasion of Ukraine.

U.S. President Joe Biden and European leaders have pushed for more oil production in order to achieve both goals.

The planned production cut of about two million barrels of crude oil per day comes out to about 2 percent of global oil production.

The White House has responded by accusing OPEC Plus of "aligning" with Russia. Saudi Arabia's decision will also put it at odds with the U.S., diplomatically speaking.

For its part, Saudi Arabia claims its acting ahead of an anticipated downward slide in the global economy that could lead to weakened demand for oil, and thus, lower prices.

As a result of the cut, the price of Brent crude -- the international standard -- rose by 1.5 percent.

The Biden administration is responding by ordering the release of 10 million barrels from the Strategic Petroleum Reserve. That follows earlier statements from the administration that it would not extend a six-month run of releasing one million extra barrels per day. That run was set to finish at the end of this month.

This all follows the announcement of a proposed plan championed by Biden and the European Union to cap the price of Russian oil.

Experts say that OPEC Plus countries often fall short of production quotas, so the actual cut may be more like one million barrels per day. They also point out that a slowing economy could still weaken demand so much that the cut doesn't matter -- prices could still come down.

We shall see what happens.

[Image: Shutterstock.com/Golden Dayz]

Become a TTAC insider. Get the latest news, features, TTAC takes, and everything else that gets to the truth about cars first by subscribing to our newsletter.

#Geopolitics #Russia #OPEC #SaudiArabia #Biden #BidenAdministration #OPECPlus #GasPrices #OilPrices #NewsBlog

Tim Healey

Tim Healey grew up around the auto-parts business and has always had a love for cars — his parents joke his first word was “‘Vette”. Despite this, he wanted to pursue a career in sports writing but he ended up falling semi-accidentally into the automotive-journalism industry, first at Consumer Guide Automotive and later at Web2Carz.com. He also worked as an industry analyst at Mintel Group and freelanced for About.com, CarFax, Vehix.com, High Gear Media, Torque News, FutureCar.com, Cars.com, among others, and of course Vertical Scope sites such as AutoGuide.com, Off-Road.com, and HybridCars.com. He’s an urbanite and as such, doesn’t need a daily driver, but if he had one, it would be compact, sporty, and have a manual transmission.

More by Tim Healey

Comments

Join the conversation

3 of 145 comments

Mike on Oct 11, 2022

Yes, I did get it wrong. Replace "espionage" with "sabotage".

Like Reply
Mike on Oct 13, 2022

Lou,

Thank you. I meant to say "sabotage". I was drinking at the time. I have no regrets.

Mike

Like Reply
- Jeff S on Oct 13, 2022
  
  So many comments one cannot blame you for having a drink or two. One way or another things will work out especially when the price of crude goes to over $100 a barrel companies will do more fracking and increase production of existing wells and if the price of oil stays up long enough there will be more drilling which will cause demand for the Saudi oil to come down and then the Saudi's will be forced to increase production to get more revenue and to put the smaller producers out of business. This happens over and over and this was before Biden entered office. The Saudi's before this announcement were not meeting their quotas by over a million barrels a day. I think in the long run we need to reduce our demand for oil which will eventually stabilize our economy. The Saudis don't have anything else to sell and prop up their economy but their oil so if we and most of the other countries reduce our demand for their oil they will be hurt more than we they don't have a diversified economy. The Saudi princes will not be able to continue their lavish lifestyles and their own people will start rebelling and possibly overthrow them. We have not really learned from the 1973 Arab Oil Embargo (OPEC) and the 1979 Iranian Hostage Crisis we seem to be repeating and repeating the same mistakes over kind of like Ground Hog Day and the definition of insanity. In the long term we need to be planning for using more and diverse types of energy and becoming more energy independent . Coal and natural gas should be used until we can develop and expand newer cleaner energy and expanding nuclear energy should be part of this equation and not just solar and wind which do not work everywhere.
  
  Like

Recent Comments

Amwhalbi My 1972 Mercury Capri was my first stick shift car. God, I miss that thing. It was a blast to drive.
Vid169489471 The technology exists today to produce a variable color temperature (kelvin) LED lamp. It can vary from 2700k that soft orange look to 6500k the bright daylight with the bluish tint.Since everything in a late model car is computer controlled, it would be an easy task to write a few lines of code that enables your vehicle to not only dim down from hi to low beam but to shift color temp down to the 2700k range for oncoming traffic, then back up to 5000k once oncoming traffic has passed. For the operator it would be automatic and seamless. For older cars they could be retrofitted with LEDs that are 2700k on low beam and 5000k on hi beam. As far as standards, there could be a lumens max, and a minimum. Several States already have minimum lumen standards going back to the old incandescent bulbs. Why not update these to national standards.
Jam169859557 More regulation is needed for ALL vehicle lighting systems. [list=1][*]The lighting that is most blinding are the rapidly flashing red, blue and amber lights on emergency vehicles. The lights themselves are blinding, flashing so rapidly that it's impossible for even the sharpest eyes to adjust. What's worse, is the nature of the emergency requires a careful view of the area surrounding the emergency vehicle. There is something going on that needs to be seen. More flashing lights is not the solution.[/*][*]Brighter headlights need to be regulated. The tall riding vehicles do not need headlights positioned so high that they blind drivers in lower riding vehicles. And those heasdlights need to be aimed properly. When I first started driving my 2020 Subaru Outback, many drivers would flash their lights, hoping I would dim my lights. This stopped after I performed am easy adjustment that tilted the beam lower. Late model Subaru headlamps are designed with a sharp cutoff that project less glare above the hood line. When the headlights are properly aimed, other drivers are not blinded by the beam.[/*][*]Customized light assemblies make it more difficult to see the marker lights (tail lamps, turn signals and side marker lamps) that have been tinted. There are many municiple codes that prohibit this tinting, but these laws are seldom enforced.[/*][/list=1]Solutions: Tight controls on emergency vehicle lighting. In trying to make these vehicles more visible, a dangerous side effect is reducing the ability of drivers to see the surrounding perils.Headlight design regulations that reduce the height of the headlight assemblies. Just because a pickup truck has a hood that sits 4 feet abouve the pavement, it does not mean the headlights need to be so high. Owneres should maintain proper adjustments to their vehicle headlights.Establish and enforce regulation requiring a illumination standard be followed.
Stl170698708 as someone who hates big government, and their interference;but you can add me to the list of people that are blinded by the lights.unfortunately "the poop is out of the horse and no way is it going back in"They have had 5 years to make lights bigger, badder and brighter because in the vehicle work it is go big or go home!Trucks are the worst because so many people use them to express their dominance and that is big, big, big $$ both at the Original Purchase and in the Aftermarket world.If, we are so lucky to get some good government regulation on this it will also take some very good Court enforcement to get the aftermarket people with fines and lawsuits.Much like the EPA did with the Diesel Tuner Industry that felt emission regulations didn't apply to them.This is from someone that owns said pickup truck with the same bright headlights,but i only use the truck when I have too and always turn off the Fog lights when driving in traffic.
Art65765977 I saw a porsche 911 with the most amazing headlights from behind approaching the Sunshine skyway in Florida. The pattern was 108 degrees across sweeping the road like a broom. My brother and I were amazed. I don't know what it looked like from the front but i am sure it was better than American cars