Ministers from six oil-producing nations will gather in St Petersburg today to grapple with stubbornly low oil prices. The Joint
Ministers from six oil-producing nations will gather in St Petersburg today to grapple with stubbornly low oil prices. The Joint Ministerial Monitoring Committee, including Russia, Saudi Arabia, Algeria, Kuwait, Oman, and Venezuela, will discuss how to best cap production and raise prices.
Fossil fuel producers have been struck by a global supply glut and a rise in competition from American shale gas. With US shale output having grown for the eighth consecutive month, that threat is only growing.
Agreed to last year, OPEC’s current framework limits output from member states and 10 additional countries, but has failed to raise prices; today, oil trades at half of its peak three years ago.
To help, the committee has invited representatives from Nigeria and Libya, both of which were exempt from production due to political crises. Their exclusion hampered progress towards boosting oil prices after both revived production, each upping output by over 170,000 barrels per day in May.
Expect the committee to recommend staying the course while adding Nigeria and Libya. There are simply no attractive alternatives on offer; cut production too much and shale fills the void, let the glut go on and no one profits.