OPEC+ will hold next month’s meeting to discuss oil production online rather than in person as originally scheduled.
Saudi Arabia and its partners will gather on June 2 — a day later than initially planned — to set policy for the second half of the year, according to a statement on the group’s website. They’re widely expected to prolong current supply curbs in an effort to stave off a surplus and shore up crude prices.
No exact reason was given for the shift, which the Organization of Petroleum Exporting Countries and its partners have been weighing for several weeks, according to delegates who asked not to be identified because the discussions were private. The poor health of Saudi King Salman Bin Abdulaziz and the death of Iran President Ebrahim Raisi may have contributed to the decision, some said.
It marks another pivot away from physical meetings for the group, which convened virtually throughout the Covid pandemic and has only held two face-to-face gatherings at its Vienna headquarters since 2020.
It made a similar last-minute switch in November amid a dispute over output quotas for African members. This time, delegates gave no indication of controversy. The 22-nation alliance, led by the Saudis and Russia, most likely will continue withholding 2 million barrels a day from the market to offset brimming US supplies and a fragile economic outlook in China and elsewhere, they said.
Moving the meeting online is “the clearest indication of a rollover” of existing quotas, said Viktor Katona, head crude analyst at market intelligence firm Kpler Ltd.
Previous extensions of the current output curbs, which are being implemented by just eight members, were announced in separate statements by the countries themselves rather than by OPEC+. Supply quotas for the other members have already been set for the rest of 2024.
The group’s intervention is having some success, propping up international crude prices above $80 a barrel in London. Riyadh needs prices close to $100 to cover ambitious spending plans, the International Monetary Fund estimates.
Alongside the decision on whether to extend its production cuts, OPEC+ is reviewing the production capacity of member nations. The results likely will influence their separate targets for 2025.
The process so far has involved tough talks with outside consultants appointed to assess the matter, according to people familiar with the talks who asked not to be identified because those discussions were private.
The United Arab Emirates has been notably public in its stance, with state giant Abu Dhabi National Oil Co. announcing a capacity of 4.85 million barrels a day — considerably higher than OPEC’s last estimate.
