BAKU, Azerbaijan, July 29. Next week’s OPEC+ meeting may provide the first hints of the group’s production policy beyond September and if opt to remove quotas, the Gulf stands to benefit most, Trend reports with reference to UK-based Capital Economics research and consulting company.
“On its current path, OPEC+ will fully unwind its pandemic-related oil output cuts in September and the cartel has so far been tight-lipped on its plans for policy beyond that. We think that the group could shift to removing the shackles of quotas altogether. This would allow for producers with spare capacity to raise oil production by however much they want,” reads the latest report released by the company.
Capital Economics believes that Saudi Arabia and the UAE would be two key beneficiaries of the move.
“Not only would raising production bring a major fillip to GDP via the oil sector – a key reason for our above-consensus economic growth forecasts this year and next – but it would also help to achieve strategic goals. The first is to capture market share as Russia’s oil production is likely to drop back over the coming years. The second, highlighted by President Biden’s Saudi trip and President Macron’s visit to the UAE, is that raising oil output will curry favour geopolitically too.”
---
Follow the author on Twitter: @Lyaman_Zeyn