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OPEC Meeting Caught between Internal Approval of Extension and Russian Stalling

OPEC Meeting Caught between Internal Approval of Extension and Russian Stalling

Wednesday, 29 November, 2017 - 10:15
The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria September 21, 2017.

Despite talks about extending the oil cut deal up to six months, many sources affirmed that Thursday’s OPEC meeting will not carry any surprises since members agree to extend the agreement for nine months (until the end of 2018).

Russia, however, continues to stall in deciding the extension duration, even though President Vladimir Putin approved the extension until the end of 2018 – but some firms objected and requested a shorter period.

Moscow stated on Friday that it is ready to back the extension of the oil curb deal, but it has not yet decided on the duration.

Oil Ministers started to arrive in Vienna on Tuesday where OPEC is based.

Thursday’s gathering appears to be a historic and decisive meeting, with around 300 journalists covering the event.

The deal is aimed at curbing crude oil reserves in industrial countries to its average in five years. Sources told Asharq Al-Awsat that the purpose might be achieved by the third quarter of 2018.

Saudi Energy Minister Khalid al-Falih said Tuesday that it was too early to talk about the duration, while UAE Minister for Energy Suhail al-Mazroui stated that the meeting will not be easy.

“We believe that the outcome of this meeting is much more uncertain than usual,” Goldman wrote.

“The absence of such a consensus is due to the uncertainty on the progress of the oil market re-balancing as well as Brent oil prices trading at $63 per barrel,” the bank said in a research note.

Goldman added: “The push for a nine month extension, four months before the cuts end and given an accelerating re-balancing further stands in the face of prior comments that the cuts should remain data dependent to assess their effectiveness.”

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