by Maha El Dahan, Alex Lawler and Ahmad Ghaddar
VIENNA (Reuters) – Saudi Arabia is considering further oil production cuts, on a voluntary basis, as part of a broader deal within OPEC and its allies, sources told Reuters, as the organization faces falling oil prices and potential oversupply.
OPEC+, which brings together the Organization of the Petroleum Exporting Countries and their allies led by Russia, produces around 40% of the world’s crude. The organization and its allies reached an agreement on its production policy after seven hours of talks, the sources said.
According to two sources within OPEC+, the organization is likely to leave its production policy unchanged for this year but proceed with further reductions in extractions in 2024 if an agreement is reached on new production bases for the members. It is not yet known when Saudi Arabia will begin further cuts in its production. The volume of decline in Riyadh’s extractions or OPEC+ as a whole is also not known.
At Sunday’s meeting, the most influential members of OPEC and the largest producers in the Gulf, led by Riyadh, tried to persuade African countries such as Nigeria and Angola, whose production is low, to have more realistic goals, the sources said.
Nigeria and Angola have long been unable to meet their production targets but have resisted setting baselines lower than the current ones because new targets could force them to make real cuts in their extractions.
In contrast, the United Arab Emirates demanded a higher baseline, as their production capacity increased. However, this could result in a drop in their quota at the global level.
OPEC has denied access to its headquarters to journalists from Reuters and other media.
(Report Ahmad Ghaddar, Alex Lawler, Maha El Dahan and Julia Payne; written by Dmitry Zhdannikov; French version Claude Chendjou)
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