The Opec+ group will be under intense pressure to reach a production cut agreement at an emergency online meeting today. But expectations are low, with many aspects of the discussions still not agreed.
The meeting is scheduled to take place at 14:00 GMT. The Opec+ alliance brings together Opec's 13 members with 11 non-Opec producers led by Russia. A total of 11 other oil-producing countries have been invited, including the US, Canada, Brazil and Norway. The Canadian province of Alberta, home to Canada's oil sands patch, has also been invited.
It is unclear which of those countries will participate. The US has said it will not take part directly. And Norway is the only country outside the Opec+ alliance to say publicly that it is willing to cut output if a wider restraint pact is agreed.
There are still no indications as to the size, allocations, duration or baseline for any production cuts and today's meeting has no clear agenda, Opec+ delegates told Argus. "This is the first time we go into such a meeting without having anything agreed," one delegate said.
Last week Russian president Vladimir Putin said the meeting should consider a collective production cut of around 10mn b/d from first-quarter levels.
The burden will fall on Russia and Saudi Arabia to shoulder most of the cut, Opec sources said. But the two heavyweights, which lead the Opec+ group, will need to overcome their differences over what action is required to support oil prices.
A dispute intensified between the pair last weekend over who was to blame for the collapse of the previous Opec+ output restraint deal and the subsequent crash in oil prices. That led to the meeting being postponed to today from 6 April.
One Opec source today confirmed that the two still do not see eye to eye on how big the cut should be, how long it should last or the baseline from which it should be calculated. Iranian oil minister Bijan Namdar Zanganeh highlighted this issue a few days ago, stressing that the success or failure of the talks could hinge on whether countries can agree, beforehand, what the baseline should be for the cuts.
Russia opposed steeper output cuts at last month's Opec+ meeting, but it is ready to take part in a new agreement on condition that the cuts are shared among the participants on a pro-rata basis. Russian news agencies say Moscow is willing to cut by 1.6mn b/d, but that is too low, according to Opec delegates.
Another point of contention is the absence of the US — the world's largest producer — from today's discussions. Washington is hoping that the Opec+ alliance will take into account the expected decline in US crude output caused by shale producers reining in spending in response to the oil price slump. Several Opec+ members have said a contribution from the US is needed for any new agreement.
Oil prices have fallen by around a third since the collapse of the Opec+ output restraint deal in March, which coincided with a plunge in demand resulting from the Covid-19 pandemic.
