OPEC+ mulls new oil production cuts amid Middle East conflict

    WORLD  30 November 2023 - 17:47

    OPEC and its Russia-led allies are considering new oil production cuts of as much as 1 million barrels a day, delegates said on November 29, despite tensions in oil markets amid the conflict in the Middle East.

    The move, which would likely send oil prices higher, could be announced Thursday at a virtual meeting of the cartel. The meeting, originally scheduled for last week, was postponed over disagreements about production, The Wall Street Journal reports.

    A deal for further cuts isn’t assured, and the prospect is facing significant resistance within the Organization of the Petroleum Exporting Countries. A rollover of most existing output curbs is the most likely scenario, the delegates said, but talks are continuing.

    Saudi Arabia in June cut production by 1 million barrels, in a unilateral move as part of a deal with the other members of the Vienna-based group. Any cuts announced Thursday would be in addition to those announced in June.

    Saudi Arabia, the world’s biggest oil producer, is in favour of the new cuts, the delegates said.

    Oil prices climbed after The Wall Street Journal reported talks of the possible cuts. Brent, the most widely traded contract, climbed about 1.5% to more than $82 a barrel.

    Analysts said the potential curbs were greater than most forecasts.

    “I was expecting half a million; 1 million is quite bullish, and we can see that in oil prices popping up,” said Bjarne Schieldrop, chief commodities analyst at SEB. A cut of 1 million “won't necessarily drive it to $90 a barrel and above but it will prevent it from falling below $80.”

    Nigeria and Angola, the two biggest African oil producers, have been resisting a downgrade of their individual quotas, which OPEC-commissioned reports say overstate their production capacity, the delegates said. The United Arab Emirates is also reluctant to cut output, they said.

    Any extra cuts, if approved, would likely draw a rebuke from the U.S., which slammed 13-strong OPEC and its 10 Russia-led allies for agreeing to a cut of 2 million barrels a day last year. The White House called the decision by the so-called OPEC+ alliance shortsighted and suggested the group was actively supporting Russia’s invasion of Ukraine.

    Arab nations such as Saudi Arabia have been critical of an offensive in Gaza by Israel, where thousands have died and large neighbourhoods have been reduced to rubble. The operation was launched in response to Palestinian militant attacks on Oct. 7 on Israel, which the U.S. has backed militarily.

    The delegates said the Middle East conflict hadn’t been brought up in the OPEC conversations.

    Geopolitical tensions have spiralled beyond Israel and the Palestinian territories. An Israeli-connected ship was recently seized by Yemeni rebels acting in solidarity with the Palestinians. Militias in Iraq—OPEC’s second-largest producer—have exchanged fire with U.S. Army bases.

    The OPEC talks also come as global industry and political leaders arrive in Dubai for the United Nations climate summit, where the role of major oil-producing countries in reducing emissions will again be a major topic of discussion.

    Saudi Arabia, which has embarked on an ambitious program of projects, including a giant new city in the desert, needs a fiscal break-even oil price of as much as $88 a barrel, according to Goldman Sachs.
    A Saudi government representative didn’t return a request for comment.

    Robert Yawger, executive director of energy futures at Mizuho Securities USA, predicted Brent prices would rise back to about $90 a barrel and benchmark U.S. crude prices to about $85 a barrel if OPEC+ followed through on the extra cuts.

    He added, though, that Saudi Arabia would find it difficult to persuade other members both to sign up for extra cuts and follow through on them given the deep existing curbs. “An old-school, really reliable, month-by-month count the barrels kind of cut: I don’t see that happening,” Yawger said.

    Caliber.Az

    Subscribe to our Telegram channel


Read also

Egypt studies plan to expand Suez Canal

04 March 2024 - 20:57

President Biden sure of victory in coming US presidential election

04 March 2024 - 20:37

Shahbaz Sharif takes oath as 24th prime minister of Pakistan

04 March 2024 - 20:20

More than 6 in 10 US adults doubt Biden’s mental capability

04 March 2024 - 20:53

Bitcoin smashes through $65,000

04 March 2024 - 20:46

Reuters: EU wants fossil fuel sector to help pay to combat climate change

04 March 2024 - 19:05
ADVERTS
Video
Latest news

    Big lesson from West’s last invasion of Russia

    05 March 2024 - 04:05

    Israel-Gaza war: Israel demands names of hostages still alive for deal on new ceasefire

    05 March 2024 - 02:05

    World needs better blueprint for structural reform

    Opinion by Financial Times

    05 March 2024 - 00:01

    Would limiting US fossil fuel production actually help climate change?

    04 March 2024 - 23:00

    How trade can help US beat China?

    04 March 2024 - 22:00

    Azerbaijan signs up to Global Methane Pledge

    04 March 2024 - 21:10

    Austrian MPs updated on prospects for Azerbaijan-Armenia peace process

    04 March 2024 - 21:05

    Egypt studies plan to expand Suez Canal

    04 March 2024 - 20:57

    More than 6 in 10 US adults doubt Biden’s mental capability

    04 March 2024 - 20:53

    Bitcoin smashes through $65,000

    04 March 2024 - 20:46

    Azerbaijan establishes Ski Journalists Club

    PHOTO

    04 March 2024 - 20:41

    President Biden sure of victory in coming US presidential election

    04 March 2024 - 20:37

    In search of mutual trust: What can be done?

    Contemplations with Orkhan Amashov

    04 March 2024 - 20:29

    Shahbaz Sharif takes oath as 24th prime minister of Pakistan

    04 March 2024 - 20:20

    16 candidates go to run off in Tehran parl. elections

    04 March 2024 - 20:17

    Cambodian People’s Party: Azerbaijan to play even greater role in regional, global affairs

    04 March 2024 - 20:05

    Azerbaijan, Pakistan intensify military cooperation

    PHOTO

    04 March 2024 - 20:05

    Azerbaijan, Bulgaria hail successful energy cooperation

    PHOTO

    04 March 2024 - 19:53

    Azerbaijan to host first meeting of BSEC tourism educational institutions

    04 March 2024 - 19:41

    Lowest voter turnout in Iran's parliamentary polls stuns ruling regime

    Azerbaijanis opposing Kurds' land claims in Iran

    04 March 2024 - 19:35

    Khankendi-Baku Ultramarathon wraps up in Azerbaijan

    PHOTO

    04 March 2024 - 19:29

    Türkiye unveils AZAT FPV kamikaze drone

    PHOTO

    04 March 2024 - 19:21

    Turkmenistan could join Organisation of Turkic States in 2024

    04 March 2024 - 19:13

    Reuters: EU wants fossil fuel sector to help pay to combat climate change

    04 March 2024 - 19:05

    Azerbaijan, Bulgaria eying development of interstate, interparliamentary cooperation

    PHOTO

    04 March 2024 - 18:57

    Azerbaijan, Qatar discuss current financial situation

    04 March 2024 - 18:45

    Turkish COBRA-II armoured tactical vehicles spotted in Kazakhstan

    PHOTO/VIDEO

    04 March 2024 - 18:37

    Palestinian president set to visit Türkiye

    Meeting with Erdoğan scheduled

    04 March 2024 - 18:25

    Algerian president's security officers block Iranian leader's guards

    VIDEO

    04 March 2024 - 18:13

    Turkish trainer aircraft “HÜRJET” accomplishes another test

    VIDEO

    04 March 2024 - 18:01

    Pundit warns against overestimating Armenia's importance in regional dynamics

    04 March 2024 - 17:54

    Baku's former train station makes way for "hybrid green corridor"

    From rails to trails/VIDEO

    04 March 2024 - 17:46

    Italian warship forced to shoot down Houthi missile in Red Sea

    04 March 2024 - 17:37

    Hungarian PM: West misses opportunity to conclude peace agreement on Ukraine

    04 March 2024 - 17:29

    Expert: Europeans unwilling to die for Armenia

    04 March 2024 - 17:20

    Iran to hold second round of elections as results of first round announced

    04 March 2024 - 17:12

    Death toll in Israel’s war on Gaza rises to 30,534

    04 March 2024 - 17:03

    Azerbaijan, Iran discuss Aghband-Julfa road construction

    04 March 2024 - 16:56

    Armenia, Greece bolstering military-technical cooperation

    04 March 2024 - 16:47

    Azerbaijani Mine Action Agency defuses over 580 munitions in liberated lands

    04 March 2024 - 16:38

All news