It took four days to overcome the dissensions, at least in public. After the postponement of the meeting on Sunday November 26, the members of the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and their allies – in particular Russia – finally met on Thursday 30 november.
From this ministerial videoconference meeting, it appears that the informal alliance known as OPEC+ is maintaining the same course. To keep black gold prices under pressure and, therefore, guarantee its income, it intends to continue to restrict part of its oil production. This time, at least until the end of March 2024.
Saudi Arabia has thus withdrawn one million barrels per day from the market since July and will extend this measure to the first quarter of 2024. Russia now plans 500,000 fewer barrels from January 1, and no longer 300,000, as this is the case today. To a lesser extent, other countries are announcing additional efforts (Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman). Enough to bring, according to the cartel, the cut targets to around 2.2 million barrels daily.
Sometimes “diverging” interests
In the immediate future, the declarations are far from having the expected effect on the market. Instead of rising again, crude oil prices contracted at the close on November 30. That is to say a drop of 0.32% for North Sea Brent: a barrel ended the day at nearly 83 dollars (76 euros), for delivery in January. And a decline of 2.44% for the American benchmark, West Texas Intermediate, to nearly $76.
This reaction can be explained in part by the relative disunity of the cartel. “The group was unable to unanimously agree on a strategy and had to rely on unilateral voluntary reductions”underlines Jorge Leon, analyst for the Norwegian firm Rystad Energy.
Among the thirteen member states of OPEC and their ten allies, some preferred to stay away from the cuts, notably Angola and Nigeria, according to Agence France-Presse. “ Each country would like others to reduce their production without having to reduce its own”, summarizes Giacomo Luciani, scientific advisor at the School of International Affairs at Sciences Po Paris. Hence interests sometimes “divergent”, he recalls, and complicated discussions.
“Governments need to maximize their revenues, at a time when some want to incur new spending, particularly on armaments”, recalls Marc-Antoine Eyl-Mazzega, director of the Energy and Climate Center at the French Institute of International Relations. Which implies, for each of them, preserving a certain balance: if they announced even more substantial cutting objectives, “they would take the risk of losing market share”he observes.
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