Organization of the Petroleum Exporting Countries (OPEC) set a precedent today with its largest oil production cuts ever — 2.2 million barrels per day. The reduction meets falling demand for oil and addresses dramatic price reductions that have been devastating for oil producers.
OPEC recommends that non-oil producers like Russia join in the cuts rather than benefit from higher prices while producing the same amount of oil.
Geoffrey Heal, a professor at Columbia University’s Graduate School of Business, explains the effect these production cuts will have on the U.S. and how they will continue to function in the future given potential lack of adherence by OPEC member nations and a developing U.S. energy policy.
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