The Organisation of Petroleum Exporting Countries and its allies will discuss whether there is a need for deeper cuts in oil production as it holds a ministerial meeting on Thursday, September 12.
The OPEC and allied producers led by Russia, a grouping known as OPEC+, agreed last year to cut oil supply by 1.2m barrels per day to support prices. The cuts came into effect on January 1.
Iraqi oil minister, Thamer Ghadhban, who made this disclosure, said that when OPEC and its allies met in June, “there was this common understanding that perhaps six months since January are not enough (time) to assess the cut that we have introduced and we need two more months.
“That’s why this meeting is going to be held tomorrow, to see if we should continue with this cut or should we introduce a deeper cut,” he said on Wednesday. “It’s not a unilateral decision; it is a common decision.”
The OPEC+ joint ministerial monitoring committee is scheduled to meet on Thursday, September 12, in Abu Dhabi on the sidelines of an energy conference.
The Iraqi minister said that when OPEC+ originally considered cuts in November, “there were two alternatives of 1.6 and 1.8mbpd.
“But there was resistance by some members and that’s why we agreed on 1.2mbpd.”
Benchmark Brent oil prices have fallen to about $60 a barrel in recent weeks from 2019 peaks of $75, as worries about a slowing global economy outweigh supply disruptions from sanctions-hit Iran and Venezuela.
Market players fear a United States – Chinese trade war could push oil demand growth below one per cent for the first time in years.
Russian energy minister, Alexander Novak, said he was concerned by the slowing global economy. He told reporters that slowing demand would be discussed at Thursday’s meeting, but said there were no concrete proposals so far to adjust output.
Saudi Arabia’s new energy minister, Prince Abdulazizbin Salman, downplayed such worries this week, saying that demand would pick up once the trade threat dissipated.
Ghadhban, whose country is the second-biggest oil producer in OPEC after Saudi Arabia, had promised to meet with the Saudi and Russian energy ministers.
