OPEC is set to roll over the oil production cuts at least at their current level and could even discuss deepening those cuts, Iraq’s Oil Minister Thamer Ghadhban said at a conference in London on Thursday.
OPEC and its non-OPEC allies in the production cut pact are meeting on July 1-2 in Vienna, after postponing their initially scheduled meeting by one week.
The comments for an almost certain OPEC rollover from Iraq—OPEC’s second-biggest producer—echo those of Khalid al-Falih, the energy minister of OPEC’s largest producer and de facto leader, Saudi Arabia, who said earlier this month that the cartel was close to reaching an agreement to extend the production cut deal beyond its current expiry date at the end of June.
“The rollover at least would be at the same level because it has not been very effective, it has been effective to a certain level to minimise the glut in the market, but there are now ideas or calls for agreeing (on) even more,” Reuters quoted Iraq’s oil minister as saying today.
Earlier this month, OPEC sources told Reuters that Algeria had floated the idea of OPEC and its allies deepening the cuts from the current 1.2 million bpd to 1.8 million bpd amid fears of faltering demand due to trade disputes and slowing global economic growth. Yet, Algeria was just floating an idea, not making a proposal, and that idea wasn’t being formally discussed, OPEC delegates told Reuters in early June.
A rollover for OPEC may be “in the bag”, as al-Falih has recently put it, but the big unknown in the larger OPEC+ group is the leader of the non-OPEC producers, Russia, whose Energy Minister Alexander Novak said earlier this week that it’s too early to say if OPEC and its allies would extend their pact to cut oil production, once again leaving the market guessing if Russia is willing to continue cutting its oil production.
By Tsvetana Paraskova for Oilprice.com
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