According to Reuters, the sources said the bloc known as OPEC+, which includes the countries of the Organization of the Petroleum Exporting Countries and allies led by Russia, has postponed the start of formal talks until at least minus three and a half hours, due to discussions on the production basis on which quotas and reductions are calculated.
The sources said that the most influential countries in OPEC and the largest oil producing countries in the Gulf, led by Saudi Arabia, are trying to convince countries that are not responding to Africa’s production, such as Nigeria and Angola, to have a more realistic goal. production.
“Discussions with African producing countries are proving difficult,” said one of the OPEC+ sources. The Angolan oil minister left the OPEC Plus meeting for an obscure reason, according to Reuters.
Meanwhile, the UAE is looking for a higher production base to reflect its growing production capacity, the sources say.
OPEC+ pumps around 40% of global crude production, which means its decisions can have a significant impact on oil prices.
Four sources close to the OPEC+ talks told Reuters further output cuts were on the table, among other proposals, at today’s meeting.
“We are discussing all” of the changes to the deal, one of the four sources said.
Three of the four sources indicated that the cuts could reach 1 million bpd in addition to the current cuts of 2 million bpd and the voluntary cuts of 1.6 million bpd that OPEC+ announced by surprise in April and which entered effective in May.
The April move helped lift oil prices by around $9 to above $87 a barrel, but they quickly fell back under pressure from worries about global economic growth and demand. And the price of Brent crude on Friday was $76 a barrel at settlement.
If the new cut is approved, it will bring total cuts to 4.66 million barrels per day, or about 4.5% of global demand.
Decisions to cut production usually take effect one month after approval, but ministers can also agree to implement them later, and they can also decide to keep production unchanged.
Last week, Saudi Energy Minister Prince Abdulaziz bin Salman said investors betting on lower oil prices should “beware”, which many market watchers interpreted as a sign of further supply reductions.
Baseline for the current year and the following year
Three OPEC+ sources also told Reuters the group would address the issue of baselines for 2023 and 2024, under which each member country would make the cuts.
Such talks have already caused disagreements.
Nigeria and Angola have long failed to meet their production targets, but both countries oppose lowering baseline levels because new targets could force them to make real cuts.
On the other hand, the UAE is calling for raising baselines in line with its growing production capacity, but that means its share of total cuts could decline.
Western countries blame OPEC for adding risks to the global economy due to high energy costs. The West also criticizes OPEC for siding with Russia, despite Western sanctions imposed over the Ukraine crisis.
However, informed sources and OPEC watchers say the West’s decision to print money over the past decade has exacerbated inflation and forced oil-producing countries to act in turn. to preserve the value of the main commodity among their exports.
Asian countries such as China and India buy the bulk of Russia’s oil exports and have refused to join Western sanctions against Russia.
OPEC has blocked media correspondents such as Reuters and others from accessing its headquarters.
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