OPEC+ Decision Will Neither Benefit OPEC+, Nor Saudis, Nor Russia - State Dept.

WASHINGTON (Sputnik) - The decision of the Organization of the Petroleum Exporting Countries (OPEC) to decrease oil production by two million barrels per day will not benefit OPEC+, Saudi Arabia or Russia in the long term, US State Department spokesperson Ned Price said on Wednesday.

Last week, OPEC+ announced that the alliance agreed to cut oil production by two million barrels per day from November and will take production levels agreed for August as a reference point.

The move was made in response to uncertainty in global oil market outlooks, in part caused by Western sanctions on Russian energy deliveries and the G7 plans to introduce a price cap on Russian crude. The decision received backlash from the United States, which demanded an increase in production to battle rising domestic prices.

"In the long term this decision will not work in interest of Saudis, Russia, OPEC," Price told reporters.

In 2020, 23 countries, including OPEC members and 10 non-cartel oil producers, reached a deal to voluntarily cut output amid the precipitous drop in oil demand as coronavirus-related shutdowns were taking place worldwide. After the initial agreement to cut production by 9.7 million barrels per day, the deal was repeatedly revised to match market conditions. OPEC+ reached pre-pandemic production levels in August 2022.

On October 6, the European Union officially published a new package of sanctions against Russia. It sets a framework for capping the price of Russian oil exports from December at a level coordinated by G7 allies.

The Council of the European Union published the regulation that says a third-country vessel carrying overpriced Russian oil should be denied "technical assistance, brokering services, financing or financial assistance, including insurance, related to any transport in the future by that vessel of crude oil or petroleum products."

The EU said that, while the ban on importing Russian seaborne crude oil remained in place, the price cap, once implemented, would allow EU operators to undertake and support the transport of Russian oil to third countries if the price remains under a pre-set cap.