Opec + production cuts add to oil market uncertainty

Opec +'s decision this week to cut the alliance's total oil production target by 2 million barrels per day (BPD) won't help the already uncertain outlook for oil supplies and oil trade flows, refiners and traders told Bloomberg.

Earlier this week, OPEC+ announced its biggest collective production cut since 2020, cutting its output target by 2 million barrels a day. In reality, most analysts estimate that the actual cut in current production will be half that amount, about 1m to 1.1m b/d, largely borne by Saudi Arabia and other Gulf producers.

However, production cuts are bound to raise costs for refiners and could tighten supplies in Asia, a major oil importing region.