Major crude producers were set to meet yesterday to discuss how to stabilize a volatile oil market amid rising US-Iran tensions in the Persian Gulf, which threaten to disrupt supply.
Key OPEC members and other major suppliers, including Russia, were to assess the oil market and examine compliance to production cuts agreed late last year.
However, the subject of Iran, which is not present, was to dominate the one-day meeting of the OPEC+ group, which came days after sabotage attacks against tankers in highly sensitive Gulf waters and the bombing of a Saudi pipeline by Iran-aligned Yemen rebels.
The meeting also comes as the full impact of re-instated US sanctions against Tehran kicks in, slashing Iran’s crude exports.
The meeting is set to make recommendations ahead of a key OPEC summit late next month, to be attended by Iran.
US President Donald Trump last month said that Saudi Arabia and other OPEC members had agreed to his request to boost oil production in order to tamp down rising prices.
Massive drops in exports by Iran and Venezuela, plus output cuts of 1.2 million barrels per day, implemented by the OPEC+ group since January, have cut supply.
However, United Arab Emirates Minister of Energy and Industray Suheil al-Mazrouei said inventories were still building up.
He told reporters on Saturday that the job of balancing the market was not yet complete, a hint that any ramp-up in production could send prices crashing as they did late last year.
OPEC and the International Energy Agency (IEA) said earlier this month that global oil supply fell last month due to US sanctions on Iran tightened and OPEC+ production cuts.
The IEA said Iranian crude production fell to 2.6 million barrels per day (bpd), down from 3.9 million before Washington announced in May last year that it would withdraw from the 2015 Iran nuclear deal and reimpose sanctions.
Iran’s output is already at its lowest level in over five years, but could tumble this month to levels not seen since the 1980-1988 Iran-Iraq war.
Energy intelligence firm Kpler sees Iranian exports plunging from 1.4 million bpd last month to about half a million barrels this month, down from 2.5 million in normal circumstances.
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