The OPEC+ group will hold an online meeting of the Ministerial Monitoring Committee (JMMC), which includes Russia and Saudi Arabia, next Monday.
The meeting comes amid turmoil in the global banking sector, which is reflected in the economic outlook, and sanctions on Russia that create uncertainty about supply.
Oil prices fell to a 15-month low days ago, driven by fears that the turmoil and a potential increase in U.S. interest rates could lead to an economic recession that would weaken fuel demand.
But prices have since recovered as fears of a global banking crisis receded and exports from the Kurdistan Region of Iraq halted, limiting supplies.
Iraq was forced to halt about 450,000 barrels per day (bpd) of crude exports from the Kurdistan region of Iraq on Saturday via an export pipeline stretching from oil fields in Kirkuk in the north of the country to the Turkish port of Ceyhan, after Iraq won an arbitration case in which it said Turkey had violated a joint agreement after allowing the Kurdistan Regional Government to export oil to the port of Ceyhan without Baghdad’s consent.
Read:Â OPEC+ Committee recommends maintaining production policy
Analysts are unlikely to move away from its current plan to cut production by two million barrels per day.
Others argue that the drop in oil prices over the past week increases the likelihood that OPEC+ will consider deepening production cuts later this year.
Saudi Energy Minister Prince Abdulaziz bin Salman confirmed in a statement in the middle of this month that OPEC+ will adhere to the reduced production target until the end of the year.
“There are those who still believe that we may amend the agreement before the end of the year, and I tell them that they have to wait until Friday, December 29, 2023 to see our full commitment to the current agreement.”
Saudi Arabia and Russia reaffirmed their countries’ commitment to the decision taken by OPEC+ during a meeting with Saudi Energy Minister and Russian Deputy Prime Minister Alexander Novak during his visit to the Kingdom. They stressed the continuation of cooperation between the two countries, within the framework of the “OPEC+” group, to enhance the stability and balance of the global market, according to the Saudi Press Agency (SPA).
Last October, OPEC+ members agreed to reduce oil production by two million barrels per day starting in November 2022, and to extend the “declaration of cooperation” until the end of 2023.
This cut was the largest since the Corona pandemic, and the second in a row for “OPEC+” after the alliance symbolically cut production by 100,000 barrels per day at the September meeting last year.
On Thursday, Reuters quoted five OPEC+ delegates as saying that the group is likely to abide by its current agreement to cut oil production at its meeting next Monday.
One delegate for Monday’s talks said: “It is difficult to expect any new development.” Another said that supply constraints from Kurdistan and recent price declines were not significant enough to influence OPEC+’s overall policy trajectory in 2023.
Three other OPEC+ delegates also said they were ruling out any policy changes on Monday.
Also, 14 traders and analysts polled by Bloomberg unanimously predicted that there would be no change in the policy followed by the OPEC+ Joint Ministerial Monitoring Committee, which has the authority to call an emergency meeting if it deems it necessary to make adjustments to production policy.
Following the forty-eighth meeting of the Joint Ministerial Monitoring Committee on April 3, there is no full meeting of OPEC+ until June, when the thirty-fifth ministerial meeting of OPEC and non-OPEC countries will be held on the fourth.
At the forty-seventh meeting of the Joint Commission, held via videoconference on February 1, the Committee reaffirmed its commitment to the announcement of the agreement, which extends until the end of 2023 as agreed at the thirty-third OPEC+ ministerial meeting.
According to the production schedule published on the OPEC website after that meeting, the OPEC+ voluntary production figure from November 2022 to December 2023 is 41.856 million barrels per day. The table showed that the level of production required for the group in August 2022 was 43.856 million barrels per day.
For more on OPEC, click here.
