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OPEC+ members endorse output cut after U.S. coercion accusation

Commodities Oct 17, 2022 08:21AM ET
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By Maha El Dahan, Aziz El Yaakoubi and Yasmin Hussein

CAIRO (Reuters) -OPEC+ member states lined up on Sunday to endorse the steep cut to its output target agreed this month after the White House, stepping up a war of words with Saudi Arabia, accused Riyadh of coercing some other nations into supporting the move.

The United States last week said the cut would boost Russia's foreign earnings and suggested it had been engineered for political reasons by Saudi Arabia, which on Sunday denied it was supporting Moscow in its invasion of Ukraine.

Saudi King Salman bin Abdulaziz said the kingdom was working hard to support stability and balance in oil markets, including establishing and maintaining agreement of the OPEC+ alliance.

OPEC+ comprises the Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia.

The Saudi defence minister, King Salman's son Prince Khalid bin Salman, also said the Oct. 5 decision to reduce output by 2 million barrels per day (bpd) - despite supply tightness in oil markets - was unanimous and based on economic factors.

His comments were backed by ministers of several OPEC+ member states including the United Arab Emirates.

The UAE's energy minister, Suhail al-Mazrouei, wrote on Twitter: "I would like to clarify that the latest OPEC+ decision, which was unanimously approved, was a pure technical decision, with NO political intentions whatsoever."

His comment followed a statement from Iraq's state oil marketer SOMO.

"There is complete consensus among OPEC+ countries that the best approach ...is a pre-emptive approach that supports market stability and provides the guidance needed for the future," a SOMO statement said.

Kuwait Petroleum Corporation Chief Executive Nawaf Saud al-Sabah also welcomed the decision by OPEC+ and said the country was keen to maintain a balanced oil markets, state news agency KUNA reported.

'PURELY TECHNICAL'

Oman and Bahrain echoed the comment in separate statements.

Algerian energy minister Mohamed Arkab, meanwhile, called the decision "historic" and said that he and OPEC Secretary General Haitham Al Ghais expressed full confidence in it, Algeria's Ennahar TV reported.

In a statement to Reuters on Monday, Arkab said the OPEC+ decision, was "a purely technical response based on purely economic considerations".

Oil inventories in major economies are lower than when OPEC has cut output in the past. Some analysts have said that recent volatility in crude markets could be remedied by a cut that would help attract investors.

Umer Karim, a research fellow at the University of Birmingham, said OPEC countries are attempting to project unity.

"The emphasis on the word 'technical' also suggests that these member states are sending a message to the U.S. that they are not a party in this row between Riyadh and Washington," Karim said.

U.S. National Security Council spokesman John Kirby (NYSE:KEX) on Thursday said that "more than one" OPEC member had felt coerced by Saudi Arabia into the vote, adding that the cut would also increase Russia's revenue and blunt the effectiveness of sanctions imposed over its invasion of Ukraine.

King Salman said in an address to the kingdom's advisory Shura Council that the country was a mediator of peace and highlighted the crown prince's initiative to release prisoners of war from Russia last month.

Khalid bin Salman on Sunday said he was "astonished" by claims his country was "standing with Russia in its war with Ukraine".

"It is telling that these false accusations did not come from the Ukrainian government," he wrote on Twitter.

OPEC+ members endorse output cut after U.S. coercion accusation
 

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Comments (13)
Allen Checora
Allen Checora Oct 17, 2022 6:48PM ET
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yet Biden doesn't want a pipeline from Canada?
Gabriel Chaparro
Gabriel Chaparro Oct 17, 2022 9:35AM ET
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maybe this is a political move to hurt democrats In the midterm. Saudis and Biden are not friends. maybe they want de Republican back in control.
Alpha Omega
Alpha Omega Oct 17, 2022 9:15AM ET
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Do your beliefs stand on facts ? US petroleum inventory is 3% over last year; Does OPEC+ know that ? What do you think? Automobile repossessions 1 million more than usual ; gasoline Inventories 6% lower than a year ago.. and today BAC declared 326 million of profit relinquished because of defaults. NobodyKnows Nothing here.
Yellow Owl
Mystic_Owl Oct 17, 2022 8:40AM ET
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US keeps on calling a state "pariah" & THEN has the guts to threat veiled as suggestions. The guts. The entire US politicians need to revisit their "How to make Friends & Influence People by Dale Carnegie".
Andrew Ulferts
Andrew Ulferts Oct 17, 2022 8:39AM ET
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“I stand with Biden”“I stand with Ukraine.”“Where a mask.”“Take this experimental gene therapy”“The 2016 election was stolen”“2020 free and fair.” “Oil is bad”“We need more oil!”“Global warming”Earth cools“Climate change, trust the Science”“Tolerance & inclusion”“Ban opposing views”“””””””””””””””””””……..Same people.
Server Admin
Server Admin Oct 17, 2022 8:39AM ET
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maybe "well said" to those that already are exposed to, and believe, a certain narrative or theory. To independents such as myself who aren't paying attention to right/left political "influencers," this is a bunch of incoherent jibberish.
gab nea
gab nea Oct 17, 2022 2:42AM ET
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this is historic and unnecessary cut during tight oil market and sky high prices! opec+ is definitely helping Russia's war and hurting the whole planet! cut all ties with opec+ countries, pur enemies!
Andrew Ulferts
Andrew Ulferts Oct 17, 2022 2:42AM ET
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What about all of demand destruction/ recession fears/ COVID in China/ Climate change & energy transition headlines? Now none of that matters since gas prices are rising ahead of mid terms? You people want less oil 99.9% of the time, now panic.
Server Admin
Server Admin Oct 17, 2022 2:42AM ET
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pretty confusing when people only see that on one side, but not the other...
Andrew Ulferts
Andrew Ulferts Oct 17, 2022 2:42AM ET
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Server Admin There are no sides. That is an illusion. There is the truth, and there is propaganda. Propaganda does not serve a political ideology, it only wishes to destroy.
Andrew Ulferts
Andrew Ulferts Oct 17, 2022 2:42AM ET
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Server Admin The only reason I take the time to post on here is to point out propaganda. I do it with my real name exposed, so that others might step out in courage as well. This is about uniting. Pulling the veil off of people that are unaware. If you don’t see what is happening in the world, you probably watch the “news” too much.
Options Trader
Options Trader Oct 16, 2022 8:29PM ET
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Nobody messes with JB. Lol
Todd Kacsmar
Todd Kacsmar Oct 16, 2022 6:06PM ET
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Impeach the mfer
Stephen Fa
Stephen Fa Oct 16, 2022 6:06PM ET
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Kamala is an asset bubble in office.
Maximus Maximus
Maximus Maximus Oct 16, 2022 6:06PM ET
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impeach opec+ ?
Server Admin
Server Admin Oct 16, 2022 6:06PM ET
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Maximus, they didn't do a very good job of explaining themselves, but if it's a negative comment that doesn't make any sense, it's been safe to assume lately that it's an inarticulate regurgitation of angered talking points against POTUS. IDK what impact cheap shots without any substance being hurled at POTUS is supposed to have though...Maybe they're poorly parroting narratives that convinced themselves into adopting stances, thinking they're also convincing others, or maybe they're just too filled with emotion to articulate anything to those who don't share the same preconceptions.
Oct 16, 2022 4:59PM ET
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Dems will lose house and senat
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Barani Krishnan
Barani Krishnan Oct 16, 2022 4:59PM ET
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This really takes the cake!: Khalid bin Salman said on Sunday he was "astonished" by claims his country was "standing with Russia in its war with Ukraine." (LOL)
Stephen Fa
Stephen Fa Oct 16, 2022 4:59PM ET
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I'll bet you $10,000 the House goes Republican.
Stephen Fa
Stephen Fa Oct 16, 2022 4:59PM ET
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$100 is pleb ante lol
Brad Albright
Brad Albright Oct 16, 2022 4:59PM ET
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Barani, my $100 bet offer was to Nils on his congressional prediction. I have no quarrel with your reporting.
Brad Albright
Brad Albright Oct 16, 2022 4:59PM ET
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"$100 is pleb ante lol" And yet, Nils won't take me up in it. I think you have insulted him.
Flat Top
Flat Top Oct 16, 2022 3:08PM ET
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Anyone who bought the dip last week will be richly rewarded this week.
 
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