May 25, 2017: OPEC ministers meet to mull extending surprising production cuts
AUSTRIA - Energy and oil ministers of the Organization of the Petroleum Exporting Countries (OPEC) will astonish experts a second time if they extend the deal for production cuts when they meet in Vienna.
At the 171st meeting, in November 2016, they agreed to cut production in 2017 by some 4.5 per cent – the first cut in eight years.
The first obstacle to the deal was the political and religious enmity of OPEC members Saudi Arabia and Iran. A second was winning the cooperation of non-OPEC members, primarily Russia.
Prices soared on the news, but the gains might not hold because of oversupply. Producers, taking advantage of the higher prices, are expected to pump as much oil as they can before the six-month deal comes into effect in January.
The New York Times, which reported on the meeting, points out that adherence is not a given. Three big and reliable gulf producers — Saudi Arabia, Kuwait and the United Arab Emirates — account for more than 60 per cent of the cuts. But the rest come from other producers who may not adhere as closely to their limits.