EMEA News
Oil Ministers Spout Rhetoric to a Market Waiting on Production Policy Details
Speculation as to what will occur at the annual Organization of the Petroleum Exporting Countries (OPEC) meeting later this month is growing as the June 22 date looms, and even though a hastily arranged advanced meeting over the weekend suggests that key matters are being discussed, participants as usual preferred to dish out rhetoric rather than information.
According to a statement released by Kuwait's Kuna news agency, Khalid al-Falih, energy minister for Saudi Arabia, met with his counterparts Bakheet al-Rashidi from Kuwait, Suhail al-Mazrouei from the United Arab Emirates, as well as Mohammed al-Rumhy, oil and gas minister from non-OPEC producer Oman.
The so-called "consultative" meeting came after the Saudis and Russia repeatedly suggested that OPEC's production cutback agreement could be adjusted to accommodate extra production in order to compensate for radically declining output from member Venezuela; and Platts noted that Kuwait (where the meeting was held), the Saudis, and the UAE "are among the few OPEC members who could raise output quickly."
However, the ministers would not confirm if they had discussed possible increases to production; instead they issued predictable bromides: specifically, they "stressed the need to maintain the existing cooperation and continue the successful endeavour carried out by the participating countries."
The rhetoric continued on Sunday following the Kuwait meeting, with Mohammed bin Salman, crown prince of Saudi Arabia, phoning British prime minister Theresa May to discuss the oil market; a statement from her office read, "Prime Minister May and the crown prince noted the importance of stability in the oil markets, which they said was in the interests of both consumers and producers."
While rumours and rhetoric coming from OPEC circles are maddening to those seeking clear information about influential production policies, it should be noted that media have added to the confusion by suggesting that OPEC turning on the taps is tantamount to its controversial crude cutback deal coming to a close.
If they are to be believed, Russia as well as OPEC members themselves have repeatedly stressed that they support an extended deal with the aim of maintaining a healthy global supply and demand balance ratio - and that at the same time they can easily adjust production to compensate for radical production declines such as those in Venezuela.
