OPEC+ agreed to the largest oil production cut since the COVID pandemic at a meeting in Vienna, despite pressure from the United States to increase production, Reuters reports.
According to Bloomberg, OPEC+ has agreed to cut its overall production limit by 2 million bpd.
The cut could spur a recovery in oil prices, which have fallen to about $90 from $120 three months ago due to fears of a global economic slowdown, rising U.S. interest rates and a stronger dollar.
The United States has insisted that OPEC not continue the cuts, arguing that the fundamentals do not support them, said a source familiar with the matter.
OPEC+ production fell by about 3.6 million bpd in August.
Higher oil prices, if triggered by significant production cuts, are likely to irritate the Biden administration ahead of the U.S. midterm elections, Citi analysts said.
JPMorgan also said it expects Washington to take countermeasures by releasing more oil stocks.
Saudi Arabia and other members of OPEC+, which includes the Organization of the Petroleum Exporting Countries and other producers including Russia, said they were seeking to prevent volatility rather than target a specific oil price.
Benchmark Brent crude rose to $93 a barrel Wednesday after rising Tuesday.
One reason Washington wants lower oil prices is to deprive Moscow of oil revenues.