Opec+ meets to debate production quotas, new cut
THE Organization of the Petroleum Exporting Countries and its allies (Opec+) met on Sunday (Jun 4) to debate a new deal possibly adjusting countries’ output quotas and a further cut in production, sources told Reuters, as the group faces flagging oil prices and a looming supply glut.
Saudi Arabia will pledge new voluntary production cuts as part of a broader Opec+ output-limiting deal, sources told Reuters.
The group delayed the start of formal talks by over six hours due to members’ discussions of production baselines, from which cuts and quotas are calculated, sources said.
Two separate Opec+ sources said the group was likely to agree a policy roll over for 2023 and make additional cuts in 2024 if new production baselines for members are agreed. It was not clear when Saudi cuts would begin.
Opec’s most influential members and biggest Gulf producers led by Saudi Arabia were trying to persuade under-producing African nations such as Nigeria and Angola to have more realistic output targets, sources said.
Opec+ pumps around 40 per cent of the world’s crude, meaning its policy decisions can have a major impact on oil prices.
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Typically, production cuts take effect the month after they are agreed but ministers could also agree a later implementation. They could also decide to hold output steady.
Western nations have accused Opec of manipulating oil prices and undermining the global economy through high energy costs. The West has also accused Opec of siding too much with Russia despite Western sanctions over Moscow’s invasion of Ukraine.
In response, Opec insiders and watchers have said the West’s money-printing over the last decade has driven inflation and forced oil-producing nations to act to maintain the value of their main export.
Asian countries such as China and India have bought the lion’s share of Russian oil exports and refused to join Western sanctions on Russia. REUTERS
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