On Sunday, some countries that produce a lot of oil decided to reduce the amount of oil being made by 1.15 million barrels each day. This plan will last until 2023 and is supposed to help keep the price of oil steady. Countries in the Organization of Petroleum Exporting Countries (OPEC) and other non-OPEC nations have come together in this so they can all be on the same page with their approach.
This week, some big countries who produce oil (like Saudi Arabia, Russia, the UAE, Iraq, Kuwait Oman and Algeria) have agreed to make less oil. They plan to cut down 1.15 million barrels of oil per day – with Saudi Arabia and Russia reducing production by 500,000 barrels each and the UAE and Kuwait cutting 144,000 bpd and 128,000 bpd respectively.
In October, the oil-producing nations announced that they will reduce the oil production by 2 million barrels a day. Joe Biden’s government felt angry about it and threatened of “consequences”. On Sunday, The White House made a statement about it. They disagreed that lowering production is a smart thing to do.
The White House recently said that President Biden would continue to work with gas producers to bring down the prices of fuel for Americans. This is because several countries have stopped using US dollars when making transactions with each other.
Alexander Babakov, the deputy chairman of the State Duma, said that BRICS countries are talking about making their own currency. China and Brazil have made a deal which lets them use their national currencies to buy Liquefied Natural Gas (LNG).
China’s been growing really quickly, which has made the BRICS bloc the largest global group when it comes to its economy. Because of this, Saudi Arabia and other major oil producers decided it would be a good idea to reduce the amount of oil they use as a safety measure in order to keep the oil market stable.
Last October, a group of politicians from the Democratic Party wanted to break connections with Saudi Arabia, pull the troops back from their region and stop selling weapons. But even though this happened, data shows that oil prices per barrel still dropped from $95 to $80.
What do you think about the oil production cuts from Saudi Arabia and other major oil countries? Do you believe that it will have a big change on global oil prices and the economy? Let us know your opinions about this in the comments section.