The Opec+ group was in talks to cut oil supplies further on Sunday as Saudi Arabia and its allies scrambled to raise the price, but hesitation from weaker African members of the group raised the prospect that no deal would be reached. can be reached.
Saudi Energy Minister Prince Abdulaziz bin Salman, the de facto leader of Opec, is expected to aim to remove up to 1 million barrels a day from the market, or about 1 percent of global inventories, marking the third cut in history. the combined Opec+ group has been implementing since October .
But other weaker members, including Nigeria and Angola, are already struggling to meet existing output targets after years of underinvestment, and are hesitant to cut deeper.
Nigeria wanted to raise, not lower, its own production target, an OPEC delegate said. The country argued that it had addressed some of the issues holding back its production and that it was ready to pump more, the deputy said after Saturday’s meeting, adding that Angola also opposed further cuts.
Prince Abdulaziz later held talks in his hotel with African producers, including Equatorial Guinea and Congo, without reaching an agreement.
Talks with other producers, including Russia, which helped form the expanded Opec+ grouping in 2016, may also be complicated for some members, mainly the UAE, by a desire to raise production baselines – the maximum production capacity levels from which cuts are made. calculated.
The UAE has long sought a higher baseline to reflect growing production capacity, and the country’s energy minister expressed confidence ahead of the meeting that Opec+ would reach a deal.
According to deputies, talks between members continued late into the night after Saturday’s core OPEC meeting. Wider Opec+ talks with Russia, Kazakhstan and Mexico are underway on Sunday.
A person close to the Saudi delegation said he believed most of the issues had been resolved before Sunday’s meeting, although about two hours after talks began, Angolan Resources Minister Diamantino Pedro Azevedo, the headquarters of the Opec left without explaining why.
OPEC Secretary General Haitham Al Ghais, the group’s official leader, accompanied Azevedo to his ministerial car and hugged him goodbye.
Saudi Arabia is keen to see the Opec+ alliance cut production again to support oil prices, which have fallen to $70 a barrel in recent weeks from more than $120 a year ago.
Riyadh needs an oil price above $80 a barrel to balance its budget, the IMF said, and to finance some of the “giga projects” that Crown Prince Mohammed bin Salman hopes will transform its economy.
When asked about further cuts or possible changes to members’ maximum production levels, Prince Abdulaziz turned away. “You have no idea what we’re talking about,” he said ahead of Sunday’s meeting.
In a sign of growing tension between the Saudi energy minister and sections of the press, several journalists, including the entire Reuters and Bloomberg teams, were blocked from attending the weekend’s meetings. It is the first time that through decades of wars, price spikes and crashes, OPEC has excluded news organizations in this way.
OPEC has faced criticism for its alliance with Russia following its full-scale invasion of Ukraine and for trying to support prices amid an energy crisis triggered by Moscow’s actions.
However, the fall in oil prices since October may have made the White House more optimistic about further production cuts, analysts say as the US tries to restore ties with Saudi Arabia.