OPEC+ members line up to approve production cuts after US coercive lawsuit

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  • The US says more than one OPEC country has been forced to cut
  • Iraq, Kuwait and other OPEC+ members stand to decide
  • The Saudi defense minister says the decision is purely economic

CAIRO, Oct 16 (Reuters) – OPEC+ member nations lined up on Sunday to approve the steep output cut agreed this month after the White House accused Riyadh of forcing some other nations to back the move and intensified a war of words with Saudi Arabia.

The United States noted on Thursday that the cut would boost Russia’s foreign revenue and suggested it was orchestrated for political reasons by Saudi Arabia, which on Sunday denied helping Moscow in its invasion of Ukraine.

Saudi King Salman bin Abdulaziz said the kingdom is working hard to support stability and balance in oil markets, including by concluding and maintaining the OPEC+ alliance deal.

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The kingdom’s defense minister and son of King Salman, Prince Khalid bin Salman, also said the Oct. 5 decision to cut production by 2 million barrels a day – despite tight oil markets – was unanimous and based on economic factors.

His comments were backed by ministers from several OPEC+ member states, including the United Arab Emirates.

Gulf State Energy Minister Suhail al-Mazrouei wrote on Twitter: “I would like to clarify that the recent OPEC+ decision, which was adopted unanimously, was a purely technical decision, without any political intent whatsoever.”

His comment followed a statement from Iraq’s state-owned oil marketer SOMO.

“There is complete consensus among OPEC+ countries that the best approach to addressing oil market conditions in the current period of uncertainty and lack of clarity is a pre-emptive approach that supports market stability and provides the guidance needed going forward,” so SOMO said in a statement.

Kuwait Petroleum Corporation chief executive Nawaf Saud al-Sabah also welcomed the decision by OPEC+ – which includes other big producers, notably Russia – and said the country is keen to maintain a balanced oil market, the state-run reported KUNA news agency.

Oman and Bahrain said in separate statements that OPEC had unanimously agreed on the reduction.

Algeria’s Energy Minister called the decision “historic” and he and OPEC Secretary General Haitham Al Ghais expressed their full confidence during a visit to Algeria, Algerian broadcaster Ennahar TV reported.

Ghais later told a press conference that the organization is aiming for a balance between supply and demand rather than a specific price.

Oil inventories in major economies are at lower levels than in the past when OPEC cut production.

Some analysts have said recent volatility in crude oil markets could be addressed by a cut that would help attract investors to an underperforming market.

US National Security Council spokesman John Kirby said Thursday that “more than one” OPEC member felt compelled to vote by Saudi Arabia, adding that the cut also boosts Russia’s revenue and would weaken the effectiveness of the sanctions imposed for his invasion of Ukraine in February.

King Salman, in an address to the kingdom’s advisory Shura Council, said the country is a broker of peace and highlighted the crown prince’s initiative to release prisoners of war from Russia last month, state-run SPA news agency reported.

Khalid bin Salman said on Sunday he was “astonished” by claims that his country was “along with Russia in its war with Ukraine”.

“It is significant that these false accusations did not come from the Ukrainian government,” he wrote on Twitter.

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Reporting by Moataz Mohamed, Yasmin Hussien, Maha El Dahan and Aziz El Yaakoubi; additional reporting by Nayera Abdallah and Ahmed Tolba; Edited by Louise Heavens, Will Dunham and Alexandra Hudson

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