Caspian Energy Journal Caspian European Club
Wednesday, 05 December 2018 11:00

Most likely outcome of the OPEC meeting

Most likely outcome of the OPEC meeting

The OPEC+ meeting is set to kickoff on Thursday in Vienna, but there is still quite a bit of uncertainty about what might come out of the meeting, Caspian Energy News ( reports with reference to

Saudi oil minister Khalid al-Falih injected a bit more uncertainty into the market with his comments in a Tuesday interview with Bloomberg. He said that Russia supports production restraints “in principle,” but that it would be “premature” to say what specifically they might agree to. He even said that OPEC+ still needs to “figure out what needs to be done and by how much.”

While there is always a bit of jawboning and word games ahead of any OPEC meeting, the comments suggest that there is still some disagreement over the specifics. “We need to get together and listen to our colleagues, hear about their views on supply and demand and their projections of their own countries’ production,” al-Falih said. “The next road to cross is whether all countries are willing to come on board and contribute to that cut.”

Meanwhile, Riyadh still needs to convince Moscow to some degree. Even though Russian President Vladimir Putin said that he was on board, Bloomberg reports that Russia only wants to cut output by 150,000 bpd, a rather modest amount, which would mean more heavy lifting by Saudi Arabia to balance the market. Russia appears willing to go along with some sort of reduction, but it also does not feel the same urgency as the Saudis, particularly because of the dynamics of how its currency fluctuates with oil prices, making lower prices much less painful compared to Saudi Arabia.

Even if Saudi Arabia and Russia are not quite on the same page regarding the size of the cut and how to share the reductions, most analysts see some sort of deal emerging from Thursday’s meeting. 

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Person in charge of the newsline: Olga Nagiyeva 

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