Opec and its allies are expected to keep the group’s oil output targets unchanged when it meets this weekend, with one eye on the impact of European sanctions targeting Russia’s oil that come into force next week.
The Opec+ group, which includes Saudi Arabia and Russia as its two largest producers, could still decide to make a small production ...
...cut, according to people familiar with the group’s discussions, but are leaning towards rolling over production targets.
The group was due to meet at Opec’s headquarters on Sunday but this week changed course to hold the meeting online, in a sign many have interpreted as the group not planning any dramatic shifts in policy.
“It means that they’ve already taken a decision,” said Jorge León, a former Opec official now at energy consultants Rystad.
“Normally, if there’s no agreement ahead of the meeting then it makes sense to bring 23 ministers to the table.”
Russia has slashed gas supplies to Europe since its invasion of Ukraine, sparking off an energy-led cost of living crisis that has left many countries grappling with inflation.
Oil prices had jumped immediately after Russia’s invasion of Ukraine and were trading at $120 a barrel as recently as June.
But they have cooled to roughly where they were trading at the beginning of the year, with Russian oil exports having only slipped slightly since the invasion and China’s zero-Covid policy crimping demand.
The G7 is also launching a so-called price cap that aims to keep Russian oil flowing to other countries like India and China ...
...— by granting waivers to sanctions targeting shipping Russian crude — but at a price point set by western powers.
The EU agreed on Friday to set the price at $60 a barrel.
Russia has repeatedly said it will not deal with any country utilising the price cap, stoking concerns it could retaliate by severing oil pipeline flows to Europe that were exempt from sanctions.
Amrita Sen, at consultancy Energy Aspects said there were “huge unknowns”.
“It is prudent for Opec+ to hold steady rather than adding to the volatility.” But Sen said the cartel could take action later in December or early next year to boost or cut supply if required.
“We believe that if the market warrants it, they would meet at a short notice,” she said.