The regime of Nicolás Maduro celebrated that OPEC + reduces the oil supply

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Venezuela's vice president of economy, Tareck El Aissami (REUTERS / Maxim Shemeto / File)
Venezuela’s vice president of economy, Tareck El Aissami (REUTERS / Maxim Shemeto / File)

The Oil Minister of the Venezuelan regime, Tarek el Aissamidescribed this Wednesday as “transcendental“The decision made by the OPEC+ -alliance led by Saudi Arabia and Russia- of reduce oil supply by 2 million barrels per day (mbd) From November.

The also sectoral Vice President of Economy affirmed, through his Twitter account, that the “balance of the energy market is essential to guarantee a reliable supply for all countries”.

According to El Aissami, the oil market “has suffered imbalances due to the imposition of sanctions, the blockade and the aggression by the West against the main oil-producing countries.”

In addition to the reduction in oil supply -the largest since May 2020-, OPEC+ agreed to extend its cooperation for another yearwith which the alliance, forged in 2016, will be maintained, at least, until the end of 2023.

Image of the PDVSA Amuay refinery complex in Punto Fijo, Venezuela (REUTERS/Carlos García Rawlins/File)
Image of the PDVSA Amuay refinery complex in Punto Fijo, Venezuela (REUTERS/Carlos García Rawlins/File)

Venezuela, whose oil production rose in August by 94,000 barrels per day (bpd) to 723,000 bpd, is exempt from the commitment to limit its extractions, in addition to Iran and Libya.

The OPEC+ alliance decided in Vienna reduce its pumping by 2 million barrels per day (mbd)which represents the largest cut in oil supply since May 2020.

The decision was taken at a ministerial conference of the Organization of the Petroleum Exporting Countries (OPEC) and its 10 allied producer nations, including Russia, Mexico and Kazakhstan. which has been the group’s first face-to-face meeting since the start of the coronavirus pandemic.

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In addition, the participating ministers agreed to extend their cooperation for another year. In their final declaration, they specify that they have agreed “adjust global production down by 2 mbd (…) from November”.

Nicolás Maduro speaks during an OPEC meeting, at the Miraflores Palace, in Caracas, Venezuela, on September 14, 2022 (REUTERS / Leonardo Fernández Viloria)
Nicolás Maduro speaks during an OPEC meeting, at the Miraflores Palace, in Caracas, Venezuela, on September 14, 2022 (REUTERS / Leonardo Fernández Viloria)

Actual cut lower than official

Nominally, this volume is equivalent to 2% of the world supply of crude oil and is about double what was expected in international markets until Tuesday, but in physical reality it will be predictably less, although equally important.

The reason is that most producers are already pumping less than the established national quota due to technical capacity issues derived from insufficient investments.

Thus, it is estimated that overall the alliance pumps between 3.5 and 4 mbd below the total quota established for Octoberof 43.85 million barrels per day (mbd), which includes the pumping of 20 countries (all except OPEC members Venezuela, Iran and Libya, which are exempt from the commitment to limit their extractions).

We will not cut 2 mbd, but we will strive in that direction”, admitted the current president of OPEC, Bruno Jean-Richard Itouaat a press conference.

After highlighting that an attempt has been made to adjust the quotas to the capacity of each country, he estimated that the real cut will be “something between one and two million” barrels per day.

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