OPEC+ members endorse output cut after U.S. coercion accusation

  • The US says more than one OPEC country has been forced to cut
  • Iraq, Kuwait and other OPEC+ members stand to decide
  • The Saudi defense minister says the decision is purely economic

CAIRO, Oct 16 (Reuters) – OPEC+ member nations lined up on Sunday to approve the steep cut in their production target agreed this month after the White House accused Riyadh of forcing some other nations to help and the move had exacerbated a war of words with Saudi Arabia.

The United States last week said the cut would boost Russia’s foreign revenues and suggested it was implemented for political reasons by Saudi Arabia, which on Sunday denied helping Moscow in its invasion of Ukraine.

Saudi King Salman bin Abdulaziz said the kingdom is working hard to support stability and balance in oil markets, including establishing and maintaining the OPEC+ alliance deal, which brings together the Organization of Petroleum Exporting Countries (OPEC) and other major producers, including Russia.

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The kingdom’s defense minister and son of King Salman, Prince Khalid bin Salman, also said the October 5 decision to cut production by 2 million barrels per day (bpd) – despite tight oil markets – was unanimous and on economic grounds factors.

His comments were backed by ministers from several OPEC+ member states, including the United Arab Emirates.

Gulf State Energy Minister Suhail al-Mazrouei wrote on Twitter: “I would like to clarify that the recent OPEC+ decision, which was adopted unanimously, was a purely technical decision, without any political intent whatsoever.”

His comment followed a statement from Iraq’s state-owned oil marketer SOMO.

“There is complete consensus among OPEC+ countries that the best approach to dealing with oil market conditions in the current period of uncertainty and lack of clarity is a pre-emptive approach that supports market stability and the guidance needed going forward offers,” a SOMO statement said.

Kuwait Petroleum Corporation chief executive Nawaf Saud al-Sabah also welcomed the OPEC+ decision, saying the country is keen to maintain a balanced oil market, state news agency KUNA reported.

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Oman and Bahrain said in separate statements OPEC had unanimously agreed on the reduction.

Algerian Energy Minister Mohamed Arkab, meanwhile, called the decision “historic” and said he and OPEC Secretary General Haitham Al Ghais expressed their full confidence, Algerian broadcaster Ennahar TV reported.

Ghais later told a press conference that the organization is aiming for a balance between supply and demand rather than a specific price.

In a statement to Reuters on Monday, Arkab said OPEC+’s decision was “a purely technical response based on purely economic considerations,” adding that it was adopted unanimously.

Oil inventories in major economies are lower than they were in the past when OPEC cut production.

Some analysts have said recent volatility in crude oil markets could be resolved with a cut, which would help attract investors to an underperforming market.

US National Security Council spokesman John Kirby said Thursday that “more than one” OPEC member felt compelled to vote by Saudi Arabia, adding that the cut also boosts Russia’s revenue and would weaken the effectiveness of the sanctions imposed for his invasion of Ukraine in February.

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King Salman, in an address to the kingdom’s advisory Shura Council, said the country is a broker of peace and highlighted the crown prince’s initiative to release prisoners of war from Russia last month, state-run SPA news agency reported.

Khalid bin Salman said on Sunday he was “astonished” by claims his country was “at war with Ukraine with Russia”.

“It is significant that these false accusations did not come from the Ukrainian government,” he wrote on Twitter.

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Reporting by Moataz Mohamed, Yasmin Hussien, Maha El Dahan and Aziz El Yaakoubi Additional reporting by Nayera Abdallah, Ahmed Tolba and Ahmad Ghaddar in London Editing by Louise Heavens, Will Dunham, Alexandra Hudson and David Goodman

Our standards: The Thomson Reuters Trust Principles.

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