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Aerial photo of an oil tanker at anchor. Stock Photo: Nickeo23/Shutterstock

Aerial photo of an oil tanker at anchor. Stock Photo: Nickeo23/Shutterstock

OPEC+ Talks Continue with Prospect for Deeper Oil Cuts Unclear

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November 29, 2023

By Maha El Dahan, Olesya Astakhova and Alex Lawler

DUBAI/LONDON, Nov 29 (Reuters) – OPEC+ is continuing to hold talks on 2024 oil policy ahead of a Thursday ministerial meeting, as sources from the producer group said both additional oil supply cuts and a rollover of existing curbs were possible. 

On Tuesday, sources had said a further delay to the meeting of the Organization of the Petroleum Exporting Countries and allies including Russia was possible amid talks which one of them described as tough as countries maintained their positions.

Two OPEC+ sources said on Wednesday the group was discussing deeper collective oil supply cuts in the first quarter of which the exact duration and volume was not yet clear.

One of them said OPEC+ may not be able to agree on a deeper cut and it was possible Thursday’s meeting could roll over existing policy.

The meeting has already been delayed from Nov. 26. OPEC+ sources said this was because of a disagreement over output quotas for African producers, though sources have since said the group has largely resolved this issue.

The talks on African quotas come against a backdrop of the United Arab Emirates being allowed, as per OPEC+’s last agreement in June, to raise output in 2024. 

Global benchmark Brent crude oil was down 0.7% near $81 a barrel as of 1527 GMT on Wednesday O/R. Prices have dropped from near $98 in late September, pressured by concerns about weaker economic growth and expectations of a supply surplus in 2024.

OPEC+ talks over production quotas have often been difficult in the past, most recently at their June meeting, which extended existing oil output cuts into 2024 and agreed the increase for the UAE because of its efforts to expand production capacity. 

Saudi Arabia, Russia and other members of OPEC+ have already pledged total oil output cuts of about 5 million barrels per day (bpd), about 5% of daily global demand, in a series of steps that started in late 2022.

This includes Saudi Arabia’s additional voluntary production cut of 1 million bpd, which is due to expire at the end of December, and a Russian export cut of 300,000 bpd until the end of the year.

(Reporting by Maha El Dahan, Olesya Astakhova, Alex Lawler and Ahmad GhaddarWriting by Alex Lawler, editing by Mark Potter, Kim Coghill and Jane Merriman)

(c) Copyright Thomson Reuters 2023.


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