OPEC+ just made the Fed’s job more complicated. Here’s why they did it — and what could be next
The logo of the OPEC is pictured at the OPEC headquarters on October 4, 2022. In October last year, the oil cartel announced its decision to cut output by two million barrels per day.
Joe Klamar | Afp | Getty Images
Several OPEC+ members are set to tighten global production by an additional 1.16 million barrels per day until the end of the year, further burdening central bank efforts to curtail global inflation — but critically protecting the alliance’s broader output strategy from political pressures.
Washington has stepped in to criticize Sunday’s announcement where eight OPEC+ producers — including group leader Saudi Arabia and key allies Kuwait and the UAE — said they would remove more than a combined 1 million barrels per day from global oil markets, as part of an independent initiative unlinked to the broader OPEC+ policy.
This adds to Russia’s existing intentions to trim 500,000 barrels per day of its own production from February output levels, now until the end of the year — bringing the combined voluntary cuts of OPEC+ members in excess of 1.6 million barrels per day.
“We don’t think cuts are advisable at this moment, given market uncertainty — and we’ve made that clear,” a spokesperson for the National Security Council said, according to Reuters.
U.S. President Joe Biden’s administration has repeatedly lambasted the OPEC+ group for its production cuts, citing the inflationary toll on households and flinging accusations of camaraderie with sanctions-struck Russia. Curbs in production lead to smaller supply, causing higher prices at the pump in importing countries which then provides a boost for headline inflation figures.
Relations devolved into a war of words with OPEC+ chair Saudi Arabia at the end of last year, when the oil group agreed a 2 million barrels per day cut until the end of 2023 — a decision upheld at ministerial and technical committees since.
One such technical council, the OPEC+ Joint Ministerial Monitoring Committee concluded on Monday with a statement that acknowledged the voluntary cuts, making no mention of a broader change in formal production policy.
Referring to the voluntary cuts, the OPEC Secretariat said they represent “a precautionary measure aimed at supporting the stability of the oil market.”
The JMMC will next convene on June 4, with a full ministerial meeting to follow.
Formal group action is arguably no longer required, with front-month June Brent futures prices up by $4.44 per barrel from the Friday settlement to $84.33 per barrel at nearly 10 a.m. London time. Some analysts now warn of prices soaring to $100 per barrel, while Goldman Sachs could drive up Brent forecasts by $5 per barrel to $95 per barrel for December 2023.
“The anticipated increase in oil prices for the rest of the year as a result of these voluntary cuts could fuel global inflation, prompting a more hawkish stance on interest rate hikes from central banks across the world. That would, however, lower economic growth and reduce oil demand expansion,” said Victor Ponsford of Rystad Energy in a research note.
Tamas Varga, of oil broker PVM, flagged the broader political risks of the organized voluntary cuts, telling CNBC that headline inflation should rise faster than anticipated.
“But central banks might not deviate from the course of slowing down the hike in borrowing as their views are chiefly shaped by core inflation figures, which will not be as much affected by stronger oil prices as headline data,” he said.
“The voices of the proponents of the NOPEC bill in the US Congress will also get louder and they will accuse OPEC+ to use oil as a weapon. The step is unreservedly bullish, for now macro worries are overtaken by supply concerns. The move will also lead to further souring of the Saudi-US relationship.”
The NOPEC — No Oil Producing and Exporting Cartels— bill refers to proposed U.S. legislation that would open OPEC+ countries to potential antitrust legal action.
The U.S. can attempt to combat price hikes by releasing further volumes from its Strategic Petroleum Reserves — with one anonymous OPEC+ delegate saying that Washington has encumbered its fight against inflation by blocking global access to Venezuela and Iranian volumes, while EU nations likewise refrain from Russian purchases out of solidarity with the invaded Ukraine.
OPEC+ delegates have previously also found fault with western nations’ windfall taxes on energy companies — which they claim received no consistent support when WTI futures traded in negative territory in April 2020 — and with the accelerated shift toward renewables that has reduced hydrocarbon investments without producing sufficient alternative green fuel to fully meet consumer demands.
Spare capacity has been at the heart of recent OPEC+ pronouncements, with the group stepping in to protect the appeal of stable return for long-term investments in oil projects. Nearly all of the countries participating in the recently-announced independent cuts possess additional capacity.
One anonymous OPEC+ source said discussions to coordinate further independent cuts gained traction toward the end of last week, when volatility in the banking sector following the failures of several U.S. and Swiss lenders eroded investor confidence in more historically volatile assets, such as oil. OPEC+ delegates have previously expressed that the oil impact of the banking turbulence would be short-lived, with longer-term questions lingering over the looming demand of a reopening China, the world’s largest consumer.
“What happened to the oil prices over the last three weeks was nothing to do with oil factors, it was everything to do with the banking crisis, and the fears that brings with it. We also had a huge, huge increase in [the] short market, and that is something that OPEC are very keen to stomp out,” Amrita Sen, co-founder and director of research at Energy Aspects, told CNBC’s Dan Murphy.
Investors generally assume short positions when they expect market or price declines.
“I do believe, if the market overtightens, or exogenous issues or shocks fade, they will reverse this cut along the line. So this isn’t set in stone for the rest of the year, but very clearly defending a floor.”
Voluntary production moves are easier to agree and unwind without staining domestic or external OPEC+ politics. Such cuts have previously been accepted by the group, provided they aligned with the spirit of existing OPEC+ policies — but they have typically expressed the initiative of a single country, barring temporary Saudi-Kuwaiti-UAE reductions organized during the Covid-19 pandemic.
A coordinated gesture of Sunday’s scale effectively creates a second, unofficial agreement on top of the existing formal OPEC+ strategy — one that does not command formal commitments and can be more readily defended when individual oil ministries face pressures from their own governments or state oil companies to increase output and short-term revenues. Independent cuts also bypass the need for unanimous OPEC+ member approval and tentatively avoid external accusations of organized anti-consumer behavior.
But the gesture will not bridge the growing political rift between OPEC+ kingpin Saudi Arabia and the Biden administration, whose influence has been increasingly supplanted by China in the Middle East. In the past month, Beijing brokered a resumption of relations between arch-rivals Tehran and Riyadh, with Saudi Arabia also taking steps to join the China-led Shanghai Cooperation Organization as a dialogue partner.
“[The organized voluntary cuts] certainly would play into the narrative that the U.S. is losing its influence in the region to either influence the actions of core OPEC producers like Saudi Arabia and the UAE, which have traditionally been client states of the U.S.,” Andy Critchlow, EMEA head of news at S&P Global Platts, told CNBC.
“You can’t really look at this in isolation from the wider geopolitical situation in the Middle East, which is seeing these core oil producers shift closer to China, shift much closer to Russia. You know, they like operating in this multipolar world, instead of being completely tied to U.S. dependency.”
Los Angeles has officially cut ties with coal. City officials say the Intermountain Power Project (IPP) in Utah – the last coal-fired power plant supplying the US’s second-largest city – went offline just before Thanksgiving.
IPP’s two massive units had a combined capacity of around 1,800 megawatts (MW) when fully operational, and as recently as 2024, they still supplied around 11% of LA’s electricity. The plant sits in Utah’s Great Basin region and powered Southern California for decades. Now, for the first time, none of LA’s power comes from coal.
There’s a political hiccup with IPP, though: the Republican-controlled Utah Legislature blocked the Intermountain Power Agency from fully retiring the coal units this year, ordering that they can’t be disconnected or decommissioned. But despite that mandate, no buyers have stepped forward to keep the outdated coal units online.
The Los Angeles Department of Water and Power (LADWP) is transitioning to newly built, hydrogen-capable generating units at the same IPP location, part of a modernization effort called IPP Renewed. These new units currently run on natural gas, but they’re designed to burn a blend of natural gas and up to 30% green hydrogen, and eventually 100% green hydrogen. LADWP plans to start adding green hydrogen to the fuel mix in 2026.
“L.A.’s coal divestment is not just about discontinuing the use of coal to power our city – it’s about building a clean energy economy that benefits every Angeleno. This milestone will further accelerate our transition to 100 percent clean energy by 2035,” said Mayor Karen Bass.
To reach that goal, LA is investing heavily in solar, wind, battery storage, and local programs that expand rooftop solar and energy efficiency.
One of the city’s biggest milestones was reached in August with the completion of the Eland Solar-plus-Storage Center – a massive project that pairs 758 megawatts of solar with 300 MW/1,200 MWh of battery storage. It’s one of the largest solar-plus-storage plants in the country, capable of powering more than 260,000 Los Angeles households. Bringing Eland online helped push LADWP’s power supply past 60% clean energy in 2025.
Read more: In a first, renewables generate more power than coal globally
The 30% federal solar tax credit is ending this year. If you’ve ever considered going solar, now’s the time to act. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
FTC: We use income earning auto affiliate links. More.
![Kia's small EV drops its camo, plus a sneak peek at the interior [Video]](https://i0.wp.com/electrek.co/wp-content/uploads/sites/3/2025/12/Kia-EV2-spotted-camo.jpeg?resize=1200,628&quality=82&strip=all&ssl=1)
Kia’s most affordable electric SUV will be here in just over a month. Ahead of its debut, the EV2 was spotted with light camo, offering our best look yet.
Kia EV2 looks more like an SUV with less camo
Just days after Kia confirmed the EV2 will debut at the Brussels Motor Show on January 9, 2026, the small electric SUV was spotted in Europe with barely any camo.
The EV2 is a fully electric B-segment SUV set to be Kia’s new entry-level EV. It will sit below the EV3, which is already the UK’s most popular retail electric vehicle and among the top-sellers in Europe.
“With the EV2, we reaffirm our commitment to make electric mobility truly accessible to a broader audience,” Kia Europe president and CEO, Marc Hedrich, said earlier this month.
Despite its compact size, the EV2 looks and feels much bigger in person. It has a similar high-riding, blocky design as Kia’s latest electric SUVs, such as the EV5 and three-row EV9.
In the teaser images Kia posted a few days ago, the EV2 was shown under a drape with a design that looked nearly identical to the EV2 Concept from earlier this year.
Now, we can finally confirm it. The Kia EV2 was recently spotted in Europe in light camo, rocking a tall, SUV-like stance. The latest image from KindelAuto gives us a solid look at its profile, which still resembles a mini EV5 or EV9.
Kia will begin EV2 production alongside the EV4 hatch at its Zilina, Slovakia, plant shortly after its debut at the Brussels Motor Show next month, ramping up output throughout 2026.
Although Kia has yet to reveal specifics, the EV2 is expected to be about 4,000 mm (157″) long, or slightly smaller than the EV3 at 4,300 mm (169.3″). It will be closer in size to the Hyundai Inster EV.
Prices are expected to start at around €30,000 ($35,000) in Europe, given that the EV3 starts at about €36,000 ($42,000).
A new video from HealerTV offers a glimpse of the interior. Although the EV2 concept included sliding benches, detachable seats, cushions, and other innovative features to unlock more space, the interior looks more like Kia’s latest EVs, such as the EV3, EV4, and EV5.
You can see it has a standard armrest and a separate storage spot, similar to the EV5. The door handles are about the same as those in the EV3 and EV4.
Although it’s just a preview since the windows were covered, the second row looks about the same as the EV3. The reporter mentioned a “family look” similar to Kia’s other electric vehicles.
The compact electric SUV is expected to ride on Hyundai’s E-GMP platform, with similar battery pack options as the EV3. The EV3 is available with 58.3 kWh and 81.4 kWh battery options, delivering a WLTP range of 410 km (255 miles) and 560 km (348 miles), respectively.
The EV2 will debut at the Brussels Motor Show on January 9, 2026. Kia will hold a press conference at 10:40 am CET to introduce the new entry-level EV. Check back for updates leading up to the event.
For those in the US, sadly, the EV2 is not expected to make the trip overseas. However, Kia is offering generous discounts of over $10,000 off its current EV lineup.
Interested in a test drive? We can help you get started. You can use the links below to find Kia’s electric vehicles near you.
FTC: We use income earning auto affiliate links. More.
Nissan is looking for a partner to co-develop new EVs with as it struggles to turn things around, but only on one condition.
Nissan is still looking for EV partners
After its plans with Honda fell through earlier this year, Nissan is still hoping to find a partnership to build next-generation EVs.
As part of its recovery plan, Re:Nissan, the automaker has already announced significant job cuts, factory closures, and other extreme measures to cut costs as it looks to return to profitability.
Nissan has been actively seeking new partnerships, but it won’t settle for “just a transaction.” Speaking to Automotive News at an event earlier this month, Ponz Pandikuthira, chief product and planning officer for Nissan Americas, said that although it was open to partnering, it would have to be a two-way street.
“We would not engage with a partner just to buy a vehicle, or platform, or piece of tech,” Pandikuthira said, adding, “That’s what makes it a long-term commitment instead of just a transaction.”
Pandikuthira suggested Nissan is already in talks with several potential partners, including Honda and Mitsubishi. Sources told Automotive News in October that Nissan was in discussions with Ford and Stellantis to supply a new electrified SUV based on the Rogue.
The sources claimed the electrified Rogue would use Nissan’s new e-POWER hybrid system. According to Pandikuthira, Nissan could also use the next-gen Frontier platform, set to underpin the new Pathfinder.
So what would the partnership look like? The product and planning boss said it could involve automakers either buying the technology or Nissan building rebadged vehicles, but the partner would still need to use its tech. It would be a two-way commitment, not just a transaction.
Either way, Nissan will need to move quickly. It already cut the Ariya electric SUV from its 2026 lineup in the US, and is reportedly struggling to sell the new LEAF.
We know we need economies of scale for an EV, and we would be open to a discussion with another partner to jointly develop an EV,” Pandikuthira stressed. That could involve a family of SUVs, Nissan’s product boss suggested.
Electrek’s Take
Starting at $29,990 with over 300 miles of range, Nissan says the 2026 LEAF has “the lowest starting MSRP for any new EV currently on sale in the US.” If it’s already having a tough time selling the low-cost LEAF EV, it could be a long road ahead for Nissan.
Like Hyundai and General Motors, which announced plans to co-develop five new vehicles, combining resources with a new partnership could help Nissan reduce development costs, leverage new tech, and achieve economies of scale.
What are your thoughts on a Nissan EV partnership? Which company would be the best fit? Let us know your thoughts in the comments.
FTC: We use income earning auto affiliate links. More.
-
Sports2 years agoStory injured on diving stop, exits Red Sox game
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports3 years agoButton battles heat exhaustion in NASCAR debut
-
Sports3 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment3 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment1 year agoHere are the best electric bikes you can buy at every price level in October 2024