OPEC+ considers deeper oil cuts ahead of Thursday’s meeting

Brent crude nears $80 mark ahead of meeting
OPEC+ considers deeper oil cuts ahead of Thursday’s meeting

Despite the delay of its policy meeting from Sunday to Thursday due to a quota dispute among certain producers, OPEC+ is contemplating the possibility of extending or intensifying oil production cuts.

Several analysts told Reuters they expect OPEC+ will extend or potentially intensify supply cuts in the coming year as a means to bolster prices.

As per Bloomberg’s report, Saudi Arabia’s voluntary reduction of 1 million barrels per day (bpd) in output, coupled with Russia’s export decrease of 300,000 bpd, is presently slated to persist until the conclusion of this year. The majority of analysts anticipate both Riyadh and Moscow to extend these measures until 2024.

Read more: Oil recovers, achieves its first weekly gains in five weeks

Ahead of the awaited meeting, oil prices experienced a decline on Monday evening, with Brent crude hovering around the $80 per barrel mark.

Brent crude futures declined by 37 cents, representing a 0.4 percent decrease, settling at $80.21. Similarly, U.S. West Texas Intermediate (WTI) crude futures experienced a loss of 29 cents, or 0.4 percent, reaching $75.25. In early trading, both contracts recorded a drop of $1.

Sparking controversy

Currently, the Organization of the Petroleum Exporting Countries (OPEC) has responded to the latest report from the International Energy Agency (IEA), which generated controversy within the energy sector by acknowledging that the oil and gas industry is confronting a critical juncture.

“This presents an extremely narrow framing of challenges before us, and perhaps expediently plays down such issues as energy security, energy access and energy affordability. It also unjustly vilifies the industry as being behind he climate crisis,” OPEC said.

In a report last week titled “The Oil and Gas Industry in Net-Zero Transitions”, IEA urged industry representatives to make a decisive choice between contributing to the climate crisis or embracing the transition to clean energy. The report’s release coincided with the Agency’s suggested benchmark scenario for achieving zero emissions.

Undiplomatic manner

“It is ironic that the IEA, an agency that has repeatedly shifted its narratives and forecasts on a regular basis in recent years, now addresses the oil and gas industry and says that this is a ‘moment of truth’,” said  OPEC Secretary General Haitham Al Ghais in a statement.

“The manner in which the IEA has unfortunately used its social media platforms in recent days to criticize and instruct the oil and gas industry is undiplomatic to say the least. OPEC itself is not an organization that would prescribe to others what they should do,” Al Ghais added.

OPEC also believes that the proposed IEA “Framework to assess the alignment of company targets with the NZE Scenario’ is a tool intended to curtail the sovereign actions and choices of oil and gas producing developing countries, through pressurizing their National Oil Companies.”

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