OPEC+ ministers met in Vienna to address falling oil prices and discuss the possibility of additional production cuts. However, tensions between Saudi Arabia and Russia raised uncertainty about the outcome of the meeting. The thirteen OPEC members met previously, and then the ten partners led by Russia joined the discussions. The meeting, which is the second face-to-face meeting since March 2020, began with a two-hour delay.
Although no specific details were disclosed, the possibility of reducing production by 0.7 to 1 million barrels per day was raised. Ministers were cautious as they arrived at the meeting, avoiding comments to reporters. Countries in need of more oil revenue are resisting production cuts, while others are advocating maintaining quotas.
Oil prices have fallen about 10% since some OPEC+ members announced a surprise cut in April. Factors such as the impact of inflation on consumption, monetary tightening by major banks, and a less robust than expected recovery in Chinese demand have contributed to this fall. Current Brent and WTI prices are well below the levels reached in March 2022, during the start of the war in Ukraine.
Analysts note that the chances of a further production cut have increased due to weakened economic indicators and fears of a recession. Saudi Arabia is expected to push for a cut of at least half a million barrels. The meeting will reveal whether Saudi Arabia can persuade Russia, the other pillar of the group, to reduce production. Despite the conflicts of interest between the two major producers, they are expected to maintain the unity of the group.
In summary, the OPEC+ meeting in Vienna seeks to address falling oil prices and discuss the possibility of further production cuts. Tensions between Saudi Arabia and Russia raise uncertainty about the outcome, but the countries are expected to seek to maintain the unity of the group.