OPEC and non-OPEC ministers meet as prices soar to three-year high

OPEC and non-OPEC ministers meet as prices soar to three-year high

With oil prices reaching their highest point in three and a half years, back patting will be in order when

OPEC oil ministers meet

Photo: AP/Nabil al-Jourani

With oil prices reaching their highest point in three and a half years, back patting will be in order when energy ministers from OPEC gather with their non-OPEC partners today.

In a bid to boost record-low prices, OPEC and 10 other countries have maintained a cap on oil production since November 2016. The result has been a more than 25% increase in the price of oil—currently trading at $68 a barrel—and a steady decrease in stored supplies. As a result, the International Energy Agency last week suggested OPEC and its partners could declare “mission accomplished”.

Indeed, looming geopolitical risks, particularly in the Middle East, threaten to put further upward pressure on prices. US President Donald Trump’s decision on whether or not to renege on the Iran nuclear deal next month will be particularly closely watched. If Mr Trump chooses to tear up the agreement, expect a substantial hike in tensions between the world’s third and fifth largest oil producers and a resultant hike in hydrocarbon prices.

While the good times may be coming to an end for oil importing economies and industries, cash-strapped oil producers such as Venezuela, Libya and Nigeria can see light at the end of the tunnel.

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