OPEC+ unlikely to change oil output policy at upcoming meet, sources say

Image credit: Getty Images

A mini OPEC+ ministerial meeting next month is unlikely to recommend changing the group’s crude output policy, including a plan to start unwinding one layer of oil output cuts from October, three sources told Reuters.

The Organization of the Petroleum Exporting Countries and allies including Russia, or OPEC+ as the group is known, will hold an online joint ministerial monitoring committee meeting (JMMC) on August 1 to review the market.

One of the three OPEC+ sources, all of whom declined to be identified by name, said the meeting would serve as a “pulse check” for the health of the market.

Oil has risen in 2024 and was trading around $85 a barrel on Thursday, finding support from Middle East conflict and falling inventories. Concern about higher for longer interest rates and demand has limited gains this year.

The Saudi government communications office did not immediately return a request for comment. OPEC‘s headquarters in Vienna did not immediately respond to a request for comment.

OPEC’s oil output

OPEC+ is currently cutting output by a total of 5.86 million barrels per day (bpd), or about 5.7 per cent of global demand, in a series of steps agreed since late 2022.

At its last meeting in June, OPEC+ agreed to extend cuts of 3.66 million bpd by a year until the end of 2025 and to prolong the most recent layer of cuts – a 2.2 million bpd cut by eight members – by three months until the end of September 2024.

OPEC+ will gradually phase out the cuts of 2.2 million bpd over the course of a year from October 2024 to September 2025.

Russian Deputy Prime Minister Alexander Novak, asked this week if the market was strong enough to take the extra volume from October, did not rule out tweaks to the agreement if needed.

“Now we have such an option (of output increase), as we said earlier, we will always evaluate the current situation,” Novak said.

In June, Saudi Energy Minister Prince Abdulaziz bin Salman had said OPEC+ could pause or reverse the production hikes if it decided the market is not strong enough.

The JMMC usually meets every two months and can make recommendations to change policy which could then be discussed and ratified in a full OPEC+ ministerial meeting of all members.

Read: OPEC holds firm on 2024 oil demand outlook, anticipates strong travel season