The 36th OPEC and non-OPEC (OPEC+) Ministerial Meeting, originally planned for Nov. 26, 2023, has been rescheduled to Thursday, Nov. 30, 2023. The unexpected move raised concerns about global crude supplies, causing oil prices to plunge more than 4% on Wednesday, Nov. 22.
The meeting postponement underscores the challenges within the OPEC+ alliance in reaching an agreement on production cuts, according to an analysis from Rystad Energy.
“Every member country acknowledges the need to reduce output to support prices into 2024. The question is how to share the burden of this. Our analysis shows that without further cuts, oil prices will remain close to $80/bbl next year. It's worth noting that a Ministerial meeting has been postponed before, but never for four days. However, this time around, it has been postponed for 4 days. Therefore, reaching a new agreement to cut production will prove to be challenging,” said Jorge León, senior vice-president, Rystad Energy.
The 2024 production quotas established back in June 2023 included lower targets for 9 of the 23 member countries, namely Russia, Nigeria, Angola, Malaysia, Azerbaijan, Equatorial Guinea, Congo, Brunei, and Sudan. It would be difficult for these countries to accept even lower production quotas.
“Despite the challenges, we still expect OPEC+ to reach an agreement to reduce production in the upcoming Ministerial meeting. This could involve further voluntary cuts from members such as the UAE, Kuwait, and Iraq. However, we cannot completely rule out the possibility of a deadlock at this point,” said León.