OPEC + meeting draws attention amid concerns over Iran’s oil supply

Headquarters of the Organization of Petroleum Exporting Countries (OPEC) in Vienna, Austria, December 17, 2018.

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London — A group of the world’s most powerful oil producers are likely to agree to continue increasing production at Tuesday’s meeting as oil prices rise as optimism grows in fuel demand. Says.

OPEC and its non-OPEC partners will meet through video conferencing to discuss the next phase of production policy.

The Middle East-dominated group, which accounts for more than one-third of world oil production, is trying to balance the expected rise in demand with the potential for increased production in Iran.

The alliance OPEC + announced a major oil production cut in 2020 to support prices when the coronavirus pandemic coincides with historic demand shock.

April, the group Selected Despite concerns about Covid around the world, it will return 2.1 million barrels of supply per day to the market between May and July, reflecting optimism about improving mobility.

OPEC + is expected to repeat this decision to gradually increase production during this week’s meeting.

Jeffrey Currie, Global Head of Product Research at Goldman Sachs, told CNBC’s Street Signs Europe, “I don’t think the event itself is an event. Tuesday.” The bigger problem underlying this. I think it ’s about how to deal with Iran. ”

Iran Under discussion Revive the 2015 nuclear deal with six world powers. The recovery in trading could bring more oil to the global market in the coming months.

“It’s too early to give specific numbers about Iran,” Curry said. “Therefore, I think the best you can expect when it comes to how they deal with Iran is a sign that they are ready to offset the increase in Iran. It comes from this conference. It can be a positive and upward surprise.

Austria’s flag can be seen in front of the International Atomic Energy Agency (IAEA) headquarters building on May 24, 2021 before a press conference by IAEA Secretary-General Rafael Grossi on monitoring Iran’s nuclear energy program. In Vienna.

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OPEC Secretary-General Mohammad Balkind Said on monday He did not believe that increased supply from Iran would cause concern.

“We expect the expected returns of Iran’s production and exports to the global market in an orderly and transparent manner,” Balkind said in a statement.

International benchmark Brent Crude oil futures traded at $ 70.75 a barrel in London on Tuesday morning, up about 2%. West Texas Intermediate Crude oil futures were $ 68.11, more than 2.7% above Friday’s closing price — there was no settlement price on Monday due to a US holiday.

Crude oil prices have risen by more than 30% this year.

Iran is likely to act “constructively”

Amrita Sen, chief oil analyst at Energy Aspect, told CNBC’s Squawk Box Europe: on Tuesday.

“We know we need more OPEC barrels as demand grows, but I think Iran will be a big question mark for them,” Sen said.

OPEC + initially agreed to a record reduction in oil production of 9.7 million barrels per day due to declining global fuel demand, but eased the reduction to 7.7 million barrels and eventually 7.2 million barrels from January did. By July, the Group’s production cuts are expected to reach 5.8 million units.

Eurasia Group analysts referred to the acronym for the nuclear deal: “The most serious problem for OPEC + in the short term is that Iran’s production could increase as the United States and Iran return to JCPOA compliance. Is related to. ” : Comprehensive Joint Action Plan.

Analysts at a risk consulting firm said they believe it is likely to return to an agreement in the third quarter of 2021 as a series of negotiations progress.

“In the medium term, OPEC + is likely to adjust its policies so that the addition of Iran’s barrel does not upset the market’s balance strategy,” they continued. “Saudi Arabia is likely to rely on Russia to better understand the scope of Iran’s policies to tackle the adjustment plan. Iran will also act constructively as rising oil prices benefit its own. “

OPEC + meeting draws attention amid concerns over Iran’s oil supply

Source link OPEC + meeting draws attention amid concerns over Iran’s oil supply

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