OPEC+ Weighs Large Oil Cutback That Could Scramble Midterms, Boost Russia

FRANKFURT, Germany (AP) — The OPEC+ alliance of oil-exporting countries on Wednesday will debate a potentially large cut in the amount of crude it ships to the global economy — a move that could help Russia weather a looming European ban on oil imports and raise gasoline prices for U.S. drivers just ahead of national midterm elections.

Energy ministers from the OPEC cartel, whose leading member is Saudi Arabia, and allied non-members including Russia are meeting in person at the group’s Vienna headquarters for the first time since early 2020 at the start of the COVID-19 pandemic. Russian Deputy Prime Minister Alexander Novak, who has been sanctioned by the U.S., was attending the meeting in Austria’s capital.

A production cut could benefit Russia by establishing higher prices ahead of a European Union ban on most Russian oil imports, a sanction over the invasion of Ukraine that takes effect at the end of the year, analysts at Commerzbank say.

Russia “will need to find new buyers for its oil when the EU embargo comes into force in early December and will presumably have to make further price concessions to do so,” the analysts wrote in a note. “Higher prices beforehand — boosted by production cuts elsewhere — would therefore doubtless be very welcome.”

Moscow also faces a separate push by the U.S. and the other Group of Seven wealthy democracies to impose a price cap on Russian oil by Dec. 5. The EU agreed Wednesday on new sanctions that are expected to include a price cap on Russian oil, an EU official said.

Oil prices surged this summer as markets worried about the loss of Russian supplies from sanctions over the war in Ukraine, but they slipped as fears about recessions in major economies and China’s COVID-19 restrictions weighed on demand for crude.

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.

It’s unclear how much impact a production cut would have on oil prices — and thus gasoline prices — because members are already unable to meet the quotas set by OPEC+. Yet Saudi Arabia may be unwilling to strain its relationship with Russia even if the world’s largest oil exporter had any reservations about cutbacks and has recently has drawn leaders from Biden to German Chancellor Olaf Scholz to talk about energy supplies.

The Commerzbank…