OPEC meeting postponed
The 36th OPEC and OPEC+ Ministerial Meeting was delayed by 4 days following an announcement by the OPEC Secretariat.
The organization did not disclose the reasons for the postponement, but Reuters reported that the delay was over a disagreement regarding the current production levels of some OPEC members. As a result of the meetings rescheduling, oil prices dropped by over $3 per barrel.
Despite an agreement to cut output by 1.66 million barrels per day, oil prices saw a major slump due to decreased demand in China and geopolitical tensions in the Middle East.
At the meeting, the immediate challenge for OPEC+ members will be to reach an agreement on oil production targets for next year amid geopolitical risks, especially in Israel. While Saudi Arabia has already implemented voluntary production cuts, several members like Russia and Nigeria are unlikely to support lower production targets. In addition, the uncertain outlook for flows coming from Iran and Venezuela makes it more unlikely that OPEC+ will change its production policy. Moving forward, the meeting’s delay indicates growing discord within OPEC over production numbers, which will likely be exacerbated by disrupted supply chains and a continued decline in oil prices into 2024.
