The IEA assures that the OPEC + oil cut can lead the global economy into recession

The International Energy Agency (IEA) considers that the cut in production announced by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, the group known as OPEC+, entails the risk of leading the global economy into a recession by the higher prices of crude oil. “The plan of the OPEC + block to drastically cut the supply of oil to the market has derailed the growth trajectory of the supply of crude oil for the rest of the year and the next”, the Agency has warned in its monthly report, published this Thursday. This planned cut has caused oil prices to rise in the markets and increased volatility.”With unstoppable inflationary pressures and interest rate hikes taking their toll, higher oil prices could be the turning point for a global economy already on the brink of recession,” the agency said. Last week, OPEC+ decided to cut its daily production by two million barrels starting in November. In this way, the countries of the group will pump a total of 41,856 million barrels per day, compared to 43,856 million in August, including a contribution of 25,416 million by OPEC, compared to the previous 26,689 million, while the countries outside to the organization will produce 16,440 million. “The massive cut in oil supply from OPEC + increases energy security risks around the world. Even taking into account lower demand expectations, it will markedly reduce a necessary increase in oil ‘stocks’ for the rest of this year and the first half of 2023,” the IEA warned.