OPEC’s de facto leader,Saudi Arabia,said the cut – the equivalent of equal to 2 per cent of global supply - was necessary to respond to rising interest rates in the West and a weaker global economy.
Oil prices remain high by historical standards and,with the likelihood of a large production cut becoming clear,Brent crude,the international benchmark,rose to $91.50 a barrel on Wednesday — up 8 per cent since last week.
European Union countries had agreed to a US plan only hours earlier to impose a price cap on Russian oil exports,joining an effort by Western countries – including Britain,Canada,Japan and Australia – to drive down prices of crude and fuel.
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Saudi Arabia and other Gulf countries feared this plan would cut oil prices across the board and could even be used against them in future.
The decision could worsen an energy supply crunch tied to the war in Ukraine which threatens widespread blackouts in the European Union this winter. The EU is moving to shore up its resources as temperatures drop and preparing for two scenarios – one in which a few member states experience power cuts,and another in which blackouts occur in many member states at the same time.
But officials insist they are better prepared for what’s to come than at the start of the war in Ukraine,with natural gas storages at nearly 90 per cent of capacity – 15 per cent higher than the same day last year.