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OPEC+ meets to debate production quotas, new cut: Sources




  • Four sources familiar with OPEC+ discussions told Reuters that further output cuts were discussed among the options for Sunday’s session.
  • Three out of four sources said cuts could amount to 1 million bpd on top of existing cuts of 2 million bpd and voluntary cuts of 1.6 million bpd, announced in a surprise move in April and which took effect in May.
  • OPEC+ pumps around 40% of the world’s crude, which means their policy decisions can have a big impact on oil prices.

The logo of OPEC is pictured at the OPEC headquarters on October 4, 2022. Last October, the oil cartel announced its decision to cut production by two million barrels per day.

Joe Klamar | Afp | Getty Images

OPEC and its allies will meet on Sunday to discuss a new deal that could possibly adjust countries’ output quotas and further cut production, sources told Reuters, as the group faces soaring oil prices and a looming supply glut.

OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, pumps around 40% of the world’s crude, meaning their policy decisions can have a big impact on oil prices.

Four sources familiar with OPEC+ discussions have told Reuters that further output cuts were discussed among the options for Sunday’s session.

“We are discussing the whole package (of changes to the agreement),” one of the four sources said.

Three out of four sources said cuts could amount to 1 million bpd on top of existing cuts of 2 million bpd and voluntary cuts of 1.6 million bpd, announced in a surprise move in April and which took effect in May.

The announcement in April helped drive oil prices about $9 a barrel higher to above $87, but they quickly retreated under pressure from concerns about global economic growth and demand. On Friday, the international benchmark Brent settled at 76 dollars.

If approved, the new cut would bring the total volume of reductions to 4.66 million bpd, or about 4.5% of global demand.

Production cuts usually take effect the month after they are agreed, but ministers can also agree on a later implementation. They can also decide to keep production stable.

OPEC+ ministers will start meeting from 11:00 (09:00 GMT) on Sunday in Vienna and have a full meeting from 12pm onwards, according to sources familiar with the latest schedule.

Saudi Arabia’s Energy Minister Prince Abdulaziz said last week that investors shorting oil prices, or betting on a price drop, should “watch out”, which many market watchers interpreted as a warning of further supply cuts.

Three OPEC+ sources also said the group will address the issue of baselines for 2023 and 2024, from which each member makes cuts.

Such talks have previously been controversial.

West African countries such as Nigeria and Angola have long been unable to produce in line with their targets, but have resisted lower baselines because new targets could force them to implement real cuts.

In contrast, the United Arab Emirates has insisted on getting higher baselines in line with its growing production capacity, but that would mean its share of the overall cuts could be reduced.

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 going too far with Russia despite Western sanctions over Moscow’s invasion of Ukraine.

In response, OPEC insiders and observers have said that Western money printing over the past decade has fueled inflation and forced oil-producing nations to act to maintain the value of their most important export.

Asian countries such as China and India have bought the lion’s share of Russian oil exports and refused to join Western sanctions against Russia.

OPEC has denied media access to its headquarters to reporters from Reuters and other news outlets.



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