Oil prices rise after major producers vow to cut production

Published

2 years ago

April 3, 2023

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Oil prices are up more than 5% after Saudi Arabia and other major producers vowed to cut production.

Brent crude, the international oil benchmark, was up 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 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.

Clifford Bennett, chief economist at ACY Securities, said in a report: “This will create both political waves across Europe and even higher general inflation in the USA, leading to renewed pressure on the Federal Reserve to keep hiking rates aggressively.”

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.”

‘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.

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 itself has not commented.

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Trump’s USAID cuts could lead to 14 million deaths, report warns

Published

5 hours ago

July 1, 2025

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Trump's USAID cuts could lead to 14 million deaths, report warns

Around 14 million people could die across the world over the next five years because of cuts to the US Agency for International Development (USAID), researchers have warned.

Children under five are expected to make up around a third (4.5 million) of the mortalities, according to a study published in The Lancet medical journal.

Estimates showed that “unless the abrupt funding cuts announced and implemented in the first half of 2025 are reversed, a staggering number of avoidable deaths could occur by 2030”.

“Beyond causing millions of avoidable deaths – particularly among the most vulnerable – these cuts risk reversing decades of progress in health and socioeconomic development in LMICs [low and middle-income countries],” the report said.

USAID programmes have prevented the deaths of more than 91 million people, around a third of them among children, the study suggests.

The agency’s work has been linked to a 65% fall in deaths from HIV/AIDS, or 25.5 million people.

Eight million deaths from malaria, more than half the total, around 11 million from diarrheal diseases and nearly five million from tuberculosis (TB), have also been prevented.

USAID has been vital in improving global health, “especially in LMICs, particularly African nations,” according to the report.

Established in 1961, the agency was tasked with providing humanitarian assistance and helping economic growth in developing countries, especially those deemed strategic to Washington.

But the Trump administration has made little secret of its antipathy towards the agency, which became an early victim of cuts carried out by the Department of Government Efficiency (DOGE) – formerly led by Elon Musk – in what the US government said was part of a broader plan to remove wasteful spending.

In March, US Secretary of State Marco Rubio said more than 80% of USAID schemes had been closed following a six-week review, leaving around 1,000 active.

The US is the world’s largest humanitarian aid donor, providing around $61bn (£44bn) in foreign assistance last year, according to government data, or at least 38% of the total, and USAID is the world’s leading donor for humanitarian and development aid, the report said.

Between 2017 and 2020, the agency responded to more than 240 natural disasters and crises worldwide – and in 2016 it sent food assistance to more than 53 million people across 47 countries.

The study assessed all-age and all-cause mortality rates in 133 countries and territories, including all those classified as low and middle-income, supported by USAID from 2001 to 2021.

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Thai PM Paetongtarn Shinawatra suspended amid outrage over leaked phone call

Published

8 hours ago

July 1, 2025

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Thai PM Paetongtarn Shinawatra suspended amid outrage over leaked phone call

Thailand’s prime minister has been suspended after a leaked phone call with a senior Cambodian politician caused outrage.

An ethics investigation into Paetongtarn Shinawatra is under way and she could end up being dismissed.

The country’s constitutional court took up a petition from 36 senators, who claimed dishonesty and a breach of ethical standards, and voted 7 to 2 to suspend her.

The prime minister’s call with Cambodia’s former leader, Hun Sen, sparked public protests after she tried to appease him and criticised a Thai army commander – a taboo move in a country where the military is extremely influential.

Ms Shinawatra was trying to defuse mounting tensions at the border – which in May resulted in the death of one Cambodian soldier.

Thousands of conservative, nationalist protesters held a demo in Bangkok on Saturday to urge her to step down.

Her party is clinging on to power after another group withdrew from their alliance a few weeks ago over the phone call. Calls for a no-confidence vote are likely.

Deputy prime minister Suriya Juangroongruangkit will take over temporarily while the court looks into the case.

The 38-year-old prime minister – Thailand‘s youngest ever leader – has 15 days to respond to the probe. She has apologised and said her approach in the call was a negotiating tactic.

The popularity of her government has slumped recently, with an opinion poll showing an approval rating of 9.2%, down from 30.9% in March.

Ms Shinawatra comes from a wealthy dynasty synonymous with Thai politics.

Her father Thaksin Shinawatra – a former Manchester City owner – and aunt Yingluck Shinawatra served as prime minister before her – in the early to mid 2000s – and their time in office also ended ignominiously amid corruption charges and military coups.

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Benjamin Netanyahu to meet Donald Trump next week amid calls for Gaza ceasefire

Published

14 hours ago

July 1, 2025

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Benjamin Netanyahu to meet Donald Trump next week amid calls for Gaza ceasefire

Israeli Prime Minister Benjamin Netanyahu will be meeting Donald Trump next Monday, according to US officials.

The visit on 7 July comes after Mr Trump suggested it was possible a ceasefire in Gaza could be reached within a week.

On Sunday, he wrote on social media: “MAKE THE DEAL IN GAZA. GET THE HOSTAGES BACK!!!”

At least 60 people killed across Gaza on Monday, in what turned out to be some of the heaviest attacks in weeks.

According to the Hamas-run health ministry, 56,500 people have been killed in the 20-month war.

The visit by Mr Netanyahu to Washington has not been formally announced and the officials who said it would be going ahead spoke on condition of anonymity.

An Israeli official in Washington also confirmed the meeting next Monday.

White House Press Secretary Karoline Leavitt said the administration was in constant communication with the Israeli government.

She said Mr Trump viewed ending the war in Gaza and returning remaining hostages held by Hamas as a top priority.

The war in Gaza broke out in retaliation for Hamas’ 7 October 2023 attacks on southern Israel that killed 1,200 people and saw a further 250 taken hostage.

An eight-week ceasefire was reached in the final days of Joe Biden’s US presidency, but Israel resumed the war in March after trying to get Hamas to accept new terms on next steps.

Talks between Israel and Hamas have stalled over whether the war should end as part of any ceasefire.