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OPEC+ Unlikely to Tweak Oil Policy in Monday Talks

Trucks wait outside the Guwahati Refinery operated by Indian Oil Corporation, in Guwahati on March 30, 2023. (Photo by Biju BORO / AFP)
Trucks wait outside the Guwahati Refinery operated by Indian Oil Corporation, in Guwahati on March 30, 2023. (Photo by Biju BORO / AFP)
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OPEC+ Unlikely to Tweak Oil Policy in Monday Talks

Trucks wait outside the Guwahati Refinery operated by Indian Oil Corporation, in Guwahati on March 30, 2023. (Photo by Biju BORO / AFP)
Trucks wait outside the Guwahati Refinery operated by Indian Oil Corporation, in Guwahati on March 30, 2023. (Photo by Biju BORO / AFP)

OPEC+ is likely to stick to its existing deal to cut oil output at a meeting on Monday, five delegates from the producer group told Reuters, after oil prices recovered following a drop to 15-month lows.

Oil has recovered towards $80 a barrel for Brent crude after falling to near $70 on March 20, as fears ease about a global banking crisis and as a halt in exports from Iraq's Kurdistan region curbs supplies.

OPEC+, which comprises the Organization of the Petroleum Exporting Countries and allies led by Russia, is due to hold a virtual meeting of its ministerial monitoring panel, which includes Russia and Saudi Arabia, on Monday.

"It is hard to expect any new development," one of the delegates said of Monday's talks. Another said the Kurdistan curbs and recent price drops were not sufficiently important to affect the overall OPEC+ policy path for 2023.

Three other OPEC+ delegates also said any policy changes were unlikely on Monday. After those talks, the next full OPEC+ meeting is not until June.

Falling oil prices are a problem for most OPEC+ members because their economies rely heavily on oil revenue.

Even so, OPEC+ delegates did not raise any suggestion of further action to support the market after the recent price drop and predicted prices would stabilize - which they have since shown signs of doing.

Last November, OPEC+ reduced its output target by 2 million barrels per day - the largest cut since the early days of the COVID-19 pandemic in 2020. The same reduction applies for the whole of 2023.

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Lebanon Hopes to Meet Foreign Bondholders in Coming Year, Finance Minister Says

A view shows Lebanon's Central Bank building in Beirut, Lebanon January 12, 2023. (Reuters)
A view shows Lebanon's Central Bank building in Beirut, Lebanon January 12, 2023. (Reuters)
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Lebanon Hopes to Meet Foreign Bondholders in Coming Year, Finance Minister Says

A view shows Lebanon's Central Bank building in Beirut, Lebanon January 12, 2023. (Reuters)
A view shows Lebanon's Central Bank building in Beirut, Lebanon January 12, 2023. (Reuters)

Lebanese officials hope to meet international bondholders to talk about restructuring debt in the next 12 months but are not planning any meetings at the World Bank/IMF Spring meetings next week, finance minister Yassin Jaber said on Tuesday.

Jaber spoke to Reuters just days before travelling to Washington for the Spring meetings - one of the biggest gatherings for financial policy makers and investors - where Lebanon will seek to show it has made progress on economic reforms to address the underlying causes of its financial crash.

Lebanon's economy began unravelling in 2019 after years of corruption and profligate spending by the country's ruling elite, and tipped into a sovereign default on its $31 billion of outstanding international bonds in March 2020.

Asked whether he planned to meet international bondholders in the next year, Jaber said, "definitely, definitely, this is as they say the elephant in the room."

"You can't escape it in the end. Lebanon is keen to resolve this issue, God willing," he said.

But the country needed to make progress on reforms - including reforming the banking sector and boosting government revenues through reforms to tax systems and customs collection - before it could start talks, Jaber said.

"We wanted, first of all, to do our homework, to put the whole reform process on the right track to get started. You can't have a house in total disorder and then say, 'I want to negotiate,'" he said.

The Lebanese delegation to the spring meetings will be the first outing at an IMF/World Bank meeting for Lebanon's new government, which took the reins in February and pledged to seek a new IMF programme. Jaber said it would be the first time a Lebanese finance minister attends in more than a decade.

Economy Minister Amer Bisat is scheduled to give an outlook on Lebanon's economy at a JPMorgan investor conference held on the sidelines, according to documents seen by Reuters.

The creditor group - which includes the heavyweight funds Amundi, Ashmore, BlackRock, BlueBay, Fidelity and T-Rowe Price as well as a group of smaller hedge funds - has recently appointed a financial advisor in preparation for debt talks.

Shortly after the bondholder group originally formed in 2021, it said it held a "blocking stake" of more than 25% across a number of Lebanon's bonds, making it a critical player in any debt restructuring.

The chunk of the bonds are also held by domestic commercial banks or the Lebanese central bank, which bought $3 billion of debt directly from a previous government in 2019.

Lebanon's bonds trade at deeply distressed levels of around 15-16 cents in the dollar. However, that is a sharp uptick from the single digits they traded in before Israel's military campaign badly weakened Lebanese armed group Hezbollah, long viewed as an obstacle to overcoming Lebanon's political paralysis.

In January, Lebanon's cabinet extended the statute of limitations on legal action over Eurobonds for another three years. Jaber said the move "reassured the bondholders".