OPEC+ cuts production

Key points from the interview:

1. OPEC+’s decision to cut oil production by 0.1 million barrels per day (Mb/d) is the first output cut since last year. However, the reduction is as symbolic as the previous month’s decision to increase production by the same volume; it accounts to less than 1% of the global oil demand with little influence on the market.
2. The reduction in production will largely come from the countries who were previously able to increase their output, primarily Saudi Arabia, the UAE and Kuwait.
3. In the short term, Russia favours reducing its gas output for gas price gains which will put pressure on the European Union.
4. However, Russia will suffer probably an irreversible reputational damage with countries such as China and India wary of its reliability as a gas supplier.
5. The gas crisis in Europe will likely worsen in winter, however there is a chance that Europe will overcome this crisis with less damage than anticipated.