Petroleum-producing countries that make up the OPEC+ cartel vowed to slash production — a surprise move that sent oil prices soaring as much as 8% while igniting fresh concerns about US inflation.

Brent crude on Monday recent rose by some 5% to around $84 a barrel after OPEC+ — whose members include Russia — said it will slash collective output by 1.16 million barrels a day. US West Texas Intermediate climbed 6.3% to $80.42 a barrel, a four-week high.

Observers on Wall Street say that the OPEC+ cuts, which could push the price of oil to $100 a barrel, will make it more likely that the Federal Reserve will once again hike interest rates during its next meeting in May.

The move is also likely to drive up gas prices at the pump for Americans while bolstering the coffers of Russian President Vladimir Putin as his military remains bogged down in its invasion of Ukraine.

The production cuts alone could push US gasoline prices up by roughly 26 cents per gallon, in addition to the usual increase that comes when refineries change the gasoline blend during the summer driving season, said Kevin Book, managing director of Clearview Energy Partners LLC.

The Energy Department calculates the seasonal increase at an average of 32 cents per gallon, Book said.

Higher gas prices will further drive up inflation — which will make the Fed more inclined to raise rates in an effort to bring costs down, John Roe, the head of Legal and General Investment Management, told The Wall Street Journal.

James Bullard, the president of the St. Louis Fed, told Bloomberg News that the OPEC+ decision was a “surprise.”

“Whether it will have a lasting impact I think is an open question,” Bullard said.

Bullard added: “Oil prices fluctuate around. It’s hard to track exactly. Some of that might feed into inflation and make our job a little bit more difficult.”

The cut in oil production was also likely to further strain ties with the US, which has called on Saudi Arabia and other allies to increase production as it tries to bring prices down and squeeze Russia’s finances.

Goldman said strategic petroleum reserve releases in the US and France, due to ongoing strikes, as well as Washington’s refusal to refill its SPR in the 2023 fiscal year, may have prompted the OPEC+ action.

Saudi Arabia and other top oil producers, including non-OPEC members such as Russia, said that they would cut output by a half a million barrels a day beginning in May and extending through the end of the year.

OPEC+ had been expected to hold output steady this year, having already cut by 2 million barrels per day in November 2022.

Saudi Arabia said its voluntary output cut was a precautionary measure aimed at supporting market stability.

Russian Deputy Prime Minister Alexander Novak said on Monday that interference with market dynamics was one of the reasons behind the cuts.

“The new cuts are underpinning that the OPEC+ group is intact and that Russia is still an integral and important part of the group,” SEB analyst Bjarne Schieldrop told Reuters.

Rystad Energy said it believed the cuts will add to tightness in the oil market and lift prices above $100 a barrel for the rest of year, possibly taking Brent as high as $110 this summer.

UBS also expects Brent to reach $100 by June, while Goldman Sachs raised its December forecast by $5 to $95.

An official at a South Korean refiner said the cut was “bad news” for oil buyers and OPEC was seeking to “protect their profit” against concerns of a global economic slowdown.

Tighter OPEC+ supply will also be negative for Japan as it may further boost inflation and weaken its economy, said Takayuki Honma, chief economist at Sumitomo Corporation Global Research.

“Producing countries apparently want to see oil prices rise to $90-$100 per barrel, but higher oil prices also mean higher risk of economic downturn and sluggish demand,” he added.

With Post wires