The OPEC+ alliance of oil-exporting countries on Wednesday will debate a potentially large cut in the amount of crude it ships to the global economy -- a move that could help Russia weather a looming European ban on oil imports and raise gasoline prices for U.S. drivers just ahead of national midterm elections.
Energy ministers from the OPEC cartel, whose leading member is Saudi Arabia, and allied non-members including Russia are meeting in person at the group's Vienna headquarters for the first time since early 2020 at the start of the COVID-19 pandemic. Russian Deputy Prime Minister Alexander Novak, who has been sanctioned by the U.S., was attending the meeting in Austria's capital.
Moscow also faces a separate push by the U.S. and the other Group of Seven wealthy democracies to impose a price cap on Russian oil by Dec. 5. The EU agreed Wednesday on new sanctions that are expected to include a price cap on Russian oil, an EU official said. It's unclear how much impact a production cut would have on oil prices -- and thus gasoline prices -- because members are already unable to meet the quotas set by OPEC+. Yet Saudi Arabia may be unwilling to strain its relationship with Russia even if the world's largest oil exporter had any reservations about cutbacks and has recently has drawn leaders from Biden to German Chancellor Olaf Scholz to talk about energy supplies.
"If the group cuts target production by 1 million barrels per day, actual output would likely drop by about 550,000 barrels per day -- as countries like Russia or Nigeria that are producing below quota would see their formal target decline but remaining above what they can currently produce," Campanella said.
The White House declined to comment before OPEC leaders made a final decision on oil production, but press secretary Karine Jean-Pierre told reporters Tuesday that the U.S. would not extend releases from its strategic reserve to increase global supplies.Biden has tried to receive credit for gasoline prices falling from their average June peak of $5.
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