(Vienna) OPEC+ member countries, some of which are expected in person in Riyadh, are meeting on Sunday, with their sights set on a possible renewal of their production cuts to support oil prices.
This biannual high mass was initially scheduled to be held at the cartel headquarters in Vienna, before being rescheduled online.
This format is maintained, according to the Organization of Petroleum Exporting Countries (OPEC). But several countries have announced that they will go to Saudi Arabia, pillar of the alliance, for face-to-face discussions.
Kazakhstan’s Energy Minister Almasadam Satkaliev confirmed his participation, according to his advisor cited by the country’s Interfax agency. Kuwait will also be represented, according to a source within the Ministry of Oil.
The Bloomberg agency also mentions Russia and the United Arab Emirates.
These countries are among the members who agreed to voluntary production reductions in November, in addition to those decided at the level of the entire group.
However, they would plead for an increase in their quotas, an expert close to OPEC explained to AFP, which would allow them to open the tap of black gold while still showing an artificial drop in production.
In fact, Iraq and Kazakhstan exceeded their quotas in the first quarter, while Russia posted overproduction in April for “technical reasons”.
Disagreements and turbulence
In the opinion of analysts, it is a question of achieving a complex arrangement to be able to extend the cuts and thus support prices undermined by economic uncertainties.
“A surprise cannot be ruled out, but we are still banking on an extension of the reductions” previously decided, commented Giovanni Staunovo of UBS.
Black gold prices have changed little since the last OPEC+ ministerial meeting, hovering around $80 for Brent from the North Sea as for American WTI.
A price range sufficient to reassure OPEC and its allies in its strategy, according to Tamas Varga, who is also banking on “a renewal of current objectives until the end of the third quarter”.
The alliance, which began to tighten the valves at the end of 2022 in the face of falling prices, has in reserve a production capacity of nearly 6 million barrels per day according to the International Energy Agency (IEA) , thus playing on the scarcity of supply.
This dual-format meeting could, however, endorse a two-speed alliance, with group-wide reductions on one side, and larger cuts on the other by a handful of willing countries.
Cutting to the chase, “not many people are ready to do it,” comments Philippe Sébille-Lopez, a specialist in geopolitical energy issues. Some producing countries are indeed reluctant to give up part of their lucrative oil revenues.
The tumultuous debates around the different production objectives had even pushed Angola to leave the OPEC ship at the end of 2023, unhappy with the quota that had been allocated to it.
Added to the dissensions between members are economic clouds: high interest rates across the world which tend to raise prices and slow down demand for crude oil, fears of a rebound in inflation in the United States, or the skepticism around the post-COVID-19 recovery in China, without forgetting the geopolitical tensions in the Middle East.