A panel of OPEC+ ministers recommended a cut to the group’s output limits of 2 million barrels day as they seek to halt a slide in oil prices caused by the weakening global economy.
The recommendation from the cartel’s Joint Ministerial Monitoring Committee will be discussed by ministers later on Wednesday before they make a final policy decision, delegates said, asking not to be named because the information is private.
If the full meeting of the Organization of Petroleum Exporting Countries and its allies ratify the proposal, it would have a smaller impact on global supply than the headline number suggests because several countries are already pumping well below their quotas. That means they would already be in compliance with their new limits without having to reduce production.
A reduction of 2 million barrels a day in the group’s output target, shared pro rata, would require just eight countries to reduce actual production and would deliver a real cut of only 880,000 barrels a day, according to Bloomberg calculations based on September output figures.
It would still be the biggest OPEC+ production cut since 2020, a move that risks adding another shock to a global economy that is already battling inflation driven by high energy costs.
Oil prices rose 0.6% in London to $92.37 a barrel as of 2:21 p.m.
The move would also irk the US — and potentially trigger a response from Washington. President Joe Biden visited Saudi Arabia earlier this year in search of higher production and lower pump prices for Americans ahead of mid-term elections in November.
Earlier on Wednesday, US officials were making calls to counterparts in the Gulf trying to push back against the move to cut production, according to people familiar with the situation.