The ministers of the Organization of Petroleum Exporting Countries “OPEC” and its allies from abroad, led by Russia, in what is known as the OPEC + alliance, will meet today, Monday, to review the policy of oil production during the coming period.
The alliance will discuss its position on the agreement reached at the meeting last July to increase production by 400,000 barrels per day each month, from August until the end of December 2021, to phase out the historical cuts of 5.8 million barrels per day by September. 2022.
The meeting comes at a time when the alliance is facing several pressures, as crude oil prices continue to rise significantly after Brent crude last Tuesday crossed the $80 barrier for the first time in 3 years.
The United States is also pressing the coalition to increase production, as oil topped the talks of Biden’s national security adviser, Jake Sullivan, and Saudi Crown Prince Mohammed bin Salman in Riyadh last Thursday.
White House spokeswoman Jen Psaki said that there is contact with OPEC about oil prices and the discussion of addressing its high cost.
Another White House spokesperson said: “The United States continues to talk to international partners, including OPEC, about the importance of competitive markets in determining prices and doing more to support the recovery.”
3 scenarios are presented
One of the scenarios put forward at today’s meeting of the coalition is to increase production, as Reuters quoted 4 sources in OPEC + that the producers are considering adding more oil than what is stipulated in the agreement, but none of them provided details on the volumes, or when supplies will increase.
The second scenario is an increase of 800,000 barrels per day for a month, with no volumes added in the following month, another OPEC+ source told Reuters.
The closest month for any increase to occur is November, when the last OPEC+ meeting decided October volumes.
One of the OPEC+ sources said, “We cannot rule out any option,” while another source stressed that the idea that the oil market may need more oil than the current deal plans is “one of the possible scenarios.”
However, the closest scenario is heading towards keeping the gradual production increase plan unchanged, according to private sources to “Energy”, as they denied the validity of the circulating news about the coalition’s intention to study increasing production by more than what was agreed upon.
Natural options, but…
“Energy” sources explained that what was reported by Reuters, quoting sources within the alliance, did not come out of the active OPEC members, stressing that OPEC + interacts with actual demand.
She said: “They know people about this, as they deal with their customers around the world on a daily basis. If there is an increase in demand above the prescribed increase, the OPEC + alliance will deal with that in a manner that is commensurate with its interest and the interest of its customers.”
In this context, the editorial advisor of “Al-Taqa”, Dr. Anas Al-Hajji, affirmed that “just because there is more than one option in front of OPEC, it is normal for all options to be discussed in its meetings…but discussing the different options is one thing, and making an appropriate decision is another thing…except That the media choose the option it deems appropriate for media promotion, and this is what Reuters did in its news of increasing production above the predetermined level.”