Baku, Azerbaijan, Nov. 28
By Elena Kosolapova - Trend:
OPEC meeting which will take place this week will be the most important cartel meeting in over than 40 years, director of Downstream Consulting at IHS Markit, Spencer Welch believes.
“As a result of the meeting in Algiers last September where OPEC suggested they would cut production by around 1 million barrels per day to a total of 32.5-33.0 million barrels per day, they are now under intense pressure to deliver on this promise. This is resulting in potentially the most important OPEC meeting since 1973, when they decided on an oil embargo on oil supply to the west,” Welch told Trend by email.
In late September, OPEC agreed to cut its oil output for the first time since 2008. The group plans to reduce output to 32.5 million barrels per day (bpd) from the current production of 33.24 million bpd. How much each country will produce is to be decided at the next formal meeting of OPEC on November 30.
Moreover OPEC officials were scheduled to meet with non-members including Russia on Nov. 28, but the meeting was cancelled last week after the Saudis decided not to take part. Saudi Arabia wants an OPEC deal in place before conversations with other producers such as Russia, one OPEC delegate told Bloomberg.
Welch noted that, a deal will be extremely challenging to deliver, given the political differences between members, particularly Saudi Arabia and Iran, and several OPEC nations actively trying to increase production – Iran, Iraq, Nigeria and Libya. However, the expert believes OPEC will reach some deal this week.
“An agreement of some sort is more likely than not to emerge this week, as there are intense financial, political and credibility pressures on OPEC to strike a deal even if it is flawed,” he said.