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The Organization of the Petroleum Exporting Countries (OPEC+) announced that it will reduce its oil production by 2 million barrels per day, the largest cut since the Covid-19 pandemic, which is equivalent to 2% of world demand. The measure threatens to shoot up prices and countries like the United States criticized the decision and accused OPEC+ of aligning itself in favor of Russia. What is OPEC+ and why do its decisions have such resonance? We analyze it in this edition of El Debate.
OPEC+ is based in Vienna, the Austrian capital, and was founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.
It was born out of the need to deal with a strong and sustained drop in prices during the second half of the 1950s, which affected those exporting countries whose economies, until today, were based on the sale of oil.
Currently, OPEC+ has 13 member countries and Mexico, Russia and Norway have aligned themselves with some of the measures. From Latin America there are only Venezuela and Ecuador.
The main mission of this organization is to defend oil prices and its decisions have an international impact, but some countries have pointed out that the entity only watches over its benefits.
How is the international context for OPEC + to have made this decision? On what basis is the president of the United States, Joe Biden, to say that OPEC + has aligned with Russia to give him a break from international sanctions? What is the immediate effect of the reduction in production? Who wins and who loses with this decision? We break it down on this show with the help of our guests:
– Ramses Pech, advisor for energy and economic affairs.
– Gerardo Rabinovich, vice-president of the Argentine Institute of Energy “General Mosconi”.
