Opec, Opec+ moves December meetings online: Sources

Spanish Market: Crude oil
29/11/22

The Opec and Opec+ ministerial meetings that were to take place in person in Vienna this coming weekend will be held online, according to six Opec+ sources.

One of the sources said the group's Joint Technical Committee (JTC) and Joint Ministerial Monitoring Committee (JMMC) will also meet virtually. Two of the sources said an official notification had yet to be sent out.

The producers' alliance held its first in-person Vienna meeting in more than two years in October, when it agreed to lower its overall production ceiling by 2mn b/d from November until the end of 2023. It abandoned meetings in Vienna after March 2020, at the onset of the Covid-19 pandemic, and from then on held monthly virtual meetings to review production policy.

The decision to move this month's meeting online essentially came down to timing, one Opec+ source said. With the G7 yet to agree the level of the price cap on Russian oil, which is due to kick in the day after the Opec+ meetings along with an EU ban on seaborne imports of Russian crude, the producer group is keen to avoid having to answer for an issue that is very much out of its control.

"We need more clarity," the source said.

Four Opec+ sources said the group is unlikely make changes to policy when they meet, and instead stick with the decisions taken in October.

The G7 scheme will allow western providers to continue supplying transport and insurance services for the shipping of Russian crude to non-G7 destinations. The level of the cap could ultimately influence whether or how Russia co-operates with the proposal. Moscow has said it will not sell its crude to countries implementing the cap, with deputy prime minister Alexander Novak saying Russia would either divert its crude to countries not abiding by the cap or reduce production altogether.

Opec+ could convene for an in-person meeting once the G7 scheme and its effects have been determined and some of the current uncertainty subsides, one Opec+ source said.

"As we have shown before, the JTC and JMMC can meet at very short notice. We have that flexibility," the source said.

Other issues facing the Opec+ group include uncertainty about the future of China's zero-Covid policies, which have restricted demand for the better part of the year. Demand could also be constrained by emerging signals of an upcoming global recession, although European statistics agencies have repeatedly cited high energy prices as the drivers of rising local inflation.

The group must also contend with contradictory political pressures. The US has called on Opec+ to feed more supplies into the global markets and help prices at the pump. In October, Washington accused Saudi Arabia of aligning with the interests of Russia through the decision to cut output quotas.

Within the alliance, Opec's second largest producer Iraq recently called for, but then withdrew a call for its production baseline to be adjusted to allow it to increase its output.

By Nader Itayim and Ruxandra Iordache

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20/12/24

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US government agencies set to shut down

20/12/24

US government agencies set to shut down

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Viewpoint: More changes for Dated crude benchmark ahead

20/12/24

Viewpoint: More changes for Dated crude benchmark ahead

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Trump backs new deal to avoid shutdown: Update

19/12/24

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US Congress passes waterways bill

19/12/24

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