OPEC reduces oil production to 1.2 mbd

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  • Sat, 12/08/2018 - 22:00
  • Twitter @OPECSecretariat

The Organization of Petroleum Exporting Countries (OPEC) decided in Vienna to reduce crude oil production to 1.2 mbd from next January 1, 2019, which will inevitably increase the price of this resource and favors countries like Iran, Libya, Venezuela, especially the latter, which in the face of international pressure would have a greater income in its main product.

Besides not reducing production such as Libya and Iran, Venezuela is assured, at least for the next 6 months, an important political lifeguard thanks to the fact that it will be able to fulfill the production necessary to pay the debts it has with China, Russia and Cuba, key allies of Nicolás Maduro in office.

The measure taken by OPEC responds to the demand of several powerful nations in the market, such as Saudi Arabia, which in addition to being a vital member, rejected outright the position adopted by the United States to state that production should not be reduced and maintain the same world values.

With more than 40% of the oil production in its possession, the organization has a large number of rejections around the world, mainly those of Donald Trump, who at the news of the reduction in noted that "OPEC scam the world", hinting that they want to completely control the oil market.

Just as Venezuela gets oxygen with the measure, Iran is not left out. After knowing that the US sanctions would limit this nation in such a way, one of the first positions adopted by their representatives at the Viene summit was to firmly state they would not reduce their production. This measure was adopted because of the sanctioned status it maintains and which limits its negotiations with the European Union and a large number of companies inthe world.

After knowing the decision of the OPEC, two scenarios are expected: the revaluation of oil in the world in search of reaching $ 100/b again, and some probable change upward of the shale, the oil that has been offered mainly by states united in recent years.

Although this is a measure that contributes to a certain part of the environment, it is also true that raising the cost will make the exploitation of this resource continue in the same way, at least, until June 2019, which could strengthen several of the world powers to begin the definitive use of other alternatives and technologies for the transport movement in all its types.


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