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OPEC+ meeting amid fears of recession

OPEC Headquarters in Vienna afp_tickers

This material 05 September 2022 – 06:12 . was published on


Faced with fears of a recession, OPEC+ countries, meeting by videoconference on Monday, are expected to satisfy themselves with a modest increase in their production targets, although some experts are expected to decline to support higher prices. Do not deny.

Thirteen members of the Organization of the Petroleum Exporting Countries (OPEC) led by Saudi Arabia and ten of its partners, led by Russia, have met to adjust October quotas.

The meeting, which will be conducted by videoconferencing, is scheduled for 11:00 GMT.

Oil prices, both North Sea Brent and US WTI (the two references for world crude), are far from their highs when they were around $140 a barrel, and posted a third consecutive monthly decline in August. , amid an increasingly gloomy global economic outlook.

Thus spreading rumors and speculations. “It is not entirely certain that OPEC will agree to a new increase in the quota of 100,000 barrels per day,” Carolyn Bain of Capital Economics explained to AFP in September.

“Given the recent fall in oil prices […]We do not rule out that production will continue [en los niveles actuales] Or even less,” he said.

The Saudi Energy Minister, Abdelaziz bin Salman, ten days ago seemed to open the door to this vision, supported by several member states of the coalition’s Joint Technical Committee.

The minister pointed to a market that has “plunged into a vicious cycle of little liquidity and extreme volatility.”

– Iran: hopes have faded –

So far, OPEC+ has resisted Western calls to increase production to control rising prices.

“Clearly the group wants to keep prices higher,” said Oanda analyst Craig Erlam.

In addition, “they may fear that the return of Iranian crude to the market will upset the market equilibrium on the supply side and cause prices to fall,” he said.

As for Matthew Holland from Energy Aspects, the group will not address the issue of reducing production until the next meeting in October.

But everything will depend on how negotiations on the Iranian nuclear program proceed.

Recently, hopes were revived that a deal could be reached, which would lead to an easing of US sanctions, particularly in relation to oil.

But that was before the United States noted that Tehran’s response to the proposed text of the European Union (EU) was “unfortunately […] It was not constructive.”

– Message to the West –

Amina Bakr, from the Energy Intelligence cabinet, however, asks that no hasty conclusions should be drawn from the statements of the Saudi Energy Minister, who, according to her, “emphasized that volatility is bad for the market.”

According to Bakr, this is “a message addressed to all Western governments that have intervened in the market” since the start of the war in Ukraine.

In their latest announcement to date, the seven most industrialized countries on Friday decided to “immediately” limit the price of Russian oil, thus limiting the resources Moscow gains from hydrocarbon sales.

Russia warned that it would not sell more oil to countries adopting this unprecedented mechanism.

This could reduce supply on the market, which could contribute to a further rise in prices, which are historically high and extremely volatile, despite their recent declines.

World Nation News Desk
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