London Daily

Focus on the big picture.
Sunday, Sep 14, 2025

Oil prices rise after major producers vow to cut production

Oil prices rise after major producers vow to cut production

The cuts have a number of consequences - as well as higher fuel prices, there is concern about the effect on inflation and wider concerns about those who will benefit, especially the Russian president.
Oil prices are up more than 6% after Saudi Arabia and other major producers vowed to cut production.

Brent crude, the international oil benchmark, increased 5.5% by 9am on Monday to $84.28 per barrel after it was announced that production would be cut by 1.15 million barrels per day from May until the end of the year.

The price climbed throughout the day and hit $85 a barrel on Monday evening - almost 6.5% up.

It comes after a previous production cut announced in October.

The resulting price increases will take some time to filter through to forecourts but will eventually add to the difficulties facing many in the UK during the cost of living crisis.

Rising oil prices will also present a further challenge to central banks trying to keep inflation in check.

There are also concerns that higher oil prices will bolster Vladimir Putin's war chest as the Ukraine war continues.

A number of countries have cut down on the energy they import from Russia since it invaded Ukraine but, according to the International Energy Agency (IEA), Russia is still exporting oil, mainly to China and India.

Kevin Book, managing director of Clearview Energy Partners LLC, said that it could take as much as a year for the cuts to take effect.

'It's a big deal... you could have a very significant price response'

However, even though the production cut accounts for only a small amount of the world's daily usage, the impact on prices could be big, he added.

"It's a big deal because of the way oil prices work," he said.
"You are in a market that is relatively balanced.

"You take a small amount away, depending on what demand does, you could have a very significant price response."

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "The development comes as a blow for inflation, with expectations of inflation coming down partly balancing on the trajectory of the oil price.

"Markets are aware that if the pressure continues, central banks will need to extend or strengthen their interest-rate hiking cycles, the expectations of which will need to be repriced."

Nigel Green, chief executive of deVere Group in Dubai, said: "The dramatic cut will only add to pressing global inflationary squeezes.

"The oil price rises can be expected to increase the cost of production and transportation, reduce consumers' purchasing power, disrupt supply chains, and lead to higher inflation expectations.

"There's real concern that the surprise decision announced by Saudi Arabia for OPEC+ will prompt central banks to maintain interest rates higher for longer, due to the inflationary impact, which will hinder economic growth."

'Stabilising the oil market'

The Saudi Energy Ministry has said its cuts are a "precautionary measure" aimed at stabilising the oil market.

Cuts were also announced by Iraq, UAE, Kuwait, Kazakhstan, Algeria and Oman.

On top of these cuts, Russia's deputy prime minister Alexander Novak said his country would extend a voluntary cut of 500,000 barrels until the end of the year, extending a reduction announced in February.

The countries are all members of the OPEC+ group, which includes OPEC (Organisation of the Petroleum Exporting Countries), Russia and others.

OPEC issued a statement following its own meeting on Monday, tallying up the production cuts promised by the countries involved, and adding: "The meeting noted that this is a precautionary measure aimed at supporting the stability of the oil market."

US President Joe Biden's administration later revealed it had been given prior notice by Saudi Arabia of the decision to cut production, but had told officials it disagreed with the move.

National Security Council spokesperson John Kirby told reporters on Monday: "We don't think that production cuts are advisable at this moment, given market uncertainty. And we made that clear."
Newsletter

Related Articles

0:00
0:00
Close
French Debt Downgrade Piles Pressure on Macron’s New Prime Minister
US and UK Near Tech, Nuclear and Whisky Deals Ahead of Trump Trip
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
Anesthesiologist Left Operation Mid-Surgery to Have Sex with Nurse
Tens of Thousands of Young Chinese Get Up Every Morning and Go to Work Where They Do Nothing
The New Life of Novak Djokovic
The German Owner of Politico Mathias Döpfner Eyes Further U.S. Media Expansion After Axel Springer Restructuring
Suspect Arrested: Utah Man in Custody for Charlie Kirk’s Fatal Shooting
In a politically motivated trial: Bolsonaro Sentenced to 27 Years for Plotting Coup After 2022 Defeat
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
ChatGPT CEO signals policy to alert authorities over suicidal youth after teen’s death
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
Starmer Establishes Economic ‘Budget Board’ to Centralise Policy and Rebuild Business Trust
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Brazilian police say ex-President Bolsonaro had planned to flee to Argentina seeking asylum
Trinidad Leader Applauds U.S. Naval Strike and Advocates Forceful Action Against Traffickers
Kim Jong Un Oversees Final Test of New High-Thrust Solid-Fuel Rocket Engine
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Supreme Court temporarily allows Trump to pause billions in foreign aid
Charlie Sheen says his father, Martin Sheen, turned him in to the police: 'The greatest betrayal possible'
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
Pig Heads Left Outside Multiple Paris Mosques in Outrage-Inducing Acts
Nvidia’s ‘Wow’ Factor Is Fading. The AI chip giant used to beat Wall Street expectations for earnings by a substantial margin. That trajectory is coming down to earth.
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
On the Anniversary of Queen Elizabeth’s Death: Prince Harry Returns to Britain
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Murdoch Family Finalises $3.3 Billion Succession Pact, Ensuring Eldest Son’s Leadership
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Court Staff Cover Up Banksy Image of Judge Beating a Protester
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
Elon Musk Poised to Become First Trillionaire Under Ambitious Tesla Pay Plan
France, at an Impasse, Heads Toward Another Government Collapse
Burning the Minister’s House Helped Protesters to Win Justice: Prabowo Fires Finance Minister in Wake of Indonesia Protests
Brazil Braces for Fallout from Bolsonaro Trial by corrupted judge
The Country That Got Too Rich? Public Spending Dominates Norway Election
Nearly 40 Years Later: Nike Changes the Legendary Slogan Just Do It
×