OPEC+ tries to agree on oil production cuts in Vienna

The OPEC+ group was locked in talks on Sunday over further oil supply cuts as Saudi Arabia and its allies struggled to prop up prices, but hesitancy from the group’s vulnerable African members raised the prospect that a deal would be reached. Not possible.

Energy Minister Prince Abdulaziz bin Salman of Saudi Arabia, the de facto leader of OPEC, aims to cut up to 1 million barrels a day from the market, or about 1 percent of global supply, the third cut by the joint OPEC+ group since October. is of. ,

But other vulnerable members, including Nigeria and Angola, are already struggling to meet current production targets after years of low investment, and have been reluctant to make deeper cuts.

An OPEC representative said Nigeria wanted to increase its production target, not cut it. The representative said after Saturday’s meeting that the country argued that it had resolved some of the problems that have been holding back its production and that it was ready to pump more, adding that Angola had also called for further cuts. had opposed

Prince Abdulaziz later convened talks at his hotel with African producers, including Equatorial Guinea and Congo, without reaching an agreement.

Talks with other producers, including Russia, which helped form the expanded OPEC+ grouping in 2016, could also be complicated by a desire to raise production baselines – the maximum production capacity level from which cuts are calculated – for some members, the main United Arab Emirates as a whole.

The UAE has long sought a higher baseline to reflect its growing production capacity and the country’s energy minister expressed confidence ahead of the meeting that OPEC+ would reach an agreement.

According to delegates, the discussions between the members lasted till late night after the meeting of the core OPEC countries on Saturday. Extensive OPEC+ talks involving Russia, Kazakhstan and Mexico get underway on Sunday.

A person close to the Saudi delegation said most issues were believed to have been resolved ahead of Sunday’s meeting, although Angola’s resources minister, Diamentino Pedro Azevedo, left OPEC headquarters unannounced about two hours after the talks.

The official leader of the group, OPEC Secretary-General Haitham Al Ghais, accompanied Azevedo to his ministerial car and bid him goodbye.

Saudi Arabia is eager for the OPEC+ alliance to cut production again to prop up oil prices, which have slipped towards $70 a barrel in recent weeks from more than $120 a year ago.

According to the IMF, Riyadh needs an oil price above $80 a barrel to balance its budget, and to finance some of the “giga-projects” that Prince Mohammed bin Salman hopes to oversee. The economy can change.

Prince Abdulaziz changed his stance when asked about further cuts or any possible changes to members’ maximum production levels. “You have no idea what we’re discussing,” he said before Sunday’s meeting.

In a sign of rising tensions between the Saudi energy minister and parts of the press, several journalists, including entire teams from Reuters and Bloomberg, were barred from attending weekend meetings. It is the first time that OPEC has singled out news organizations in this way through decades of wars, price increases and crashes.

OPEC has faced criticism for its alliance with Russia following its full-scale invasion of Ukraine and attempts to prop up prices during the energy crisis triggered by Moscow’s actions.

The drop in oil prices since October has made the White House more optimistic about further production cuts, however, according to analysts, as the US seeks to mend ties with Saudi Arabia.