OPEC+ makes big oil cut to boost prices; pump costs may rise

FRANKFURT, Germany (AP) — The OPEC+ alliance of oilexporting countries decided Wednesday to sharply cut production to support sagging oil prices, a move that could deal the struggling global economy another blow and raise politically sensitive pump prices for U.S. drivers just ahead of key national elections.

Energy ministers cut production by a larger-thanexpected 2 million barrels per day starting in November after gathering for their first face-toface meeting at the Vienna headquarters of the OPEC oil cartel since the start of the COVID-19 pandemic.

The group said the decision was based on the "uncertainty that surrounds the global economic and oil market outlooks." Saudi Energy Minister Abdulaziz bin Salman stressed the cartel's stated role as a guardian of stable energy markets.

"We are here to stay as a moderating force, to bring about stability," he told reporters.

Besides a token trim last month, the major cut in the amount of crude that OPEC+ ships to the world is an abrupt turnaround from months of restoring deep cuts made during the depths of the pandemic. As demand rebounded, global energy prices have swung wildly since Russia invaded Ukraine, helping fuel inflation that is squeezing economies around the world.

The impact of the production cut on oil prices — and thus the price of gasoline made from crude — will be limited somewhat because OPEC+ members already can't meet their quotas.

The decision could help alliance member Russia weather a looming European ban on most of Moscow's oil and comes amid an energy crisis created by Russia reducing natural gas supplies to Europe, whose leaders call it retaliation for supporting Ukraine and imposing sanctions.

Oil is trading well below its summer peaks because of fears that major global economies such as the U.S. or Europe will sink into recession due to high inflation, rising interest rates and uncertainty over the war in Ukraine.

"We are going through a period of diverse uncertainties, which could come our way, it's a brewing cloud," bin Salman said, adding that OPEC+ sought to remain "ahead of the curve."

The fall in oil prices has been a boon to U.S. drivers, who saw lower gasoline prices at the pump before costs recently started ticking up, and for U.S. President Joe Biden as his Democratic Party gears up for congressional elections next month.