OPEC+ agreed Monday to cut oil production for the first time in over a year, delegates said, saying it should pull back about 100,000 barrels a day amid fears of a global recession and more Iranian crude coming to the market in the event of a revived nuclear deal.
The move shows how worries over an economic slowdown are dominating a global oil market that has experienced a 25% decline in Brent crude prices in the past three months. Fears of oil shortages after Russia’s invasion of Ukraine drove prices above $100 a barrel for months this year, but the market’s recent slide prompted the Organization of the Petroleum Exporting Countries and Moscow-led allies, collectively known as OPEC+, to consider the step of cutting output at its virtual meeting Monday.
The small cut would reverse the 100,000 barrels a day that OPEC+ said it would add to the market last month following President Biden’s trip to Saudi Arabia, the world’s largest oil exporter. The U.S. and the West have called on OPEC+ to pump more oil to help tame rising inflation, but the group had resisted.
Brent crude rose 3.76% on Monday to $96.63.