Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, convened a meeting with his counterparts from the United Arab Emirates (UAE), Iraq, and Libya on Monday.
This meeting followed US President Donald Trump’s public call for the Organization of the Petroleum Exporting Countries to lower oil prices and preceded a crucial meeting of the alliance scheduled for the following week.
The official Saudi Press Agency (SPA) reported that Saudi Energy Minister Prince Abdulaziz bin Salman met with Iraqi and Libyan counterparts Hayan Abdel-Ghani and Khalifa Abdulsadek in Riyadh.
Focus on market stability
SPA reported that Saudi Arabia and Libya’s energy ministers talked about bolstering joint efforts to maintain stability in global energy markets in order to serve their mutual interests.
Additionally, SPA reported that cooperation to achieve mutual interests was discussed with the Iraqi counterpart.
The gathering of energy ministers from major oil-producing nations underscored the growing tensions in the global oil market and the significant influence of geopolitical factors on oil prices.
Trump’s vocal demands for lower oil prices added pressure on OPEC and its allies to respond to the concerns of oil-consuming nations, particularly the US.
David Morrison, senior market analyst at Trade Nation:
Mr Trump’s move comes on the back of talk to encourage US energy production through deregulation and opening up previously restricted areas for oil exploration. All this should put downward pressure on crude prices.
The meeting also highlighted the complex dynamics within OPEC+, a group that includes both OPEC members and non-OPEC oil producers like Russia.
While some members may be inclined to increase production to stabilise prices, others may be hesitant due to concerns about potential oversupply and its impact on their economies.
The discussions among the energy ministers likely focused on finding a delicate balance between the interests of oil producers and consumers.
They may have explored strategies to manage oil production levels, address market volatility, and ensure a stable and predictable oil market.
OPEC to raise output from April
The cartel and its allies are scheduled to raise production of crude oil from April and unwind some of their voluntary output cuts.
Eight members of the OPEC+ group had been adhering to steep voluntary production cuts of 2.2 million barrels per day since early 2024.
This is on top of another 3.65 million barrels a day of cuts by the whole group.
Last year, OPEC had delayed the unwinding of the 2.2 million barrels per day of voluntary cuts multiple times in order to strike a fine balance between supply and demand.
China’s struggling economy and poor demand for crude oil had weighed on global oil prices throughout last year, which forced OPEC to extend their output cuts till the end of March 2025.
The Joint Ministerial Monitoring Committee (JMMC) of OPEC+ will convene on February 3. OPEC+ is an alliance that includes OPEC, led by Saudi Arabia, and other oil-producing countries, including Russia.
OPEC may remain cautious
The plan to increase oil output comes at a time when market experts believe that this year oil would be in surplus.
The International Energy Agency earlier this month had projected that the oil market would experience a surplus of around 750,000 barrels per day this year.
It expects supply to grow by 1.5 million barrels a day in non-OPEC countries such as the US, Argentina, Guyana, Canada and Brazil.
The fresh US sanctions against Russia’s oil supply have created a sort of shortage of oil in China and India.
However, if the gap persists, it could be filled by Middle Eastern oil-producing countries, according to IEA.
Therefore, the outcome of the OPEC+ meeting the following week will be closely watched by oil markets and global economies.
The decisions made by the alliance will have significant implications for oil prices, energy security, and the overall economic outlook.
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