Fabric Products,Fabric Information,Fabric Factories,Fabric Suppliers Fabric News Postpone the meeting and propose conditions for further production cuts! This time, the deadlock on OPEC+ production cuts is not easy to resolve!

Postpone the meeting and propose conditions for further production cuts! This time, the deadlock on OPEC+ production cuts is not easy to resolve!



Some analysts say that it is not that difficult for Saudi Arabia to deal with the “cheating” Iraq. OPEC+ is determined to revive oil prices after a long-standing feud due to member countries renegin…

Some analysts say that it is not that difficult for Saudi Arabia to deal with the “cheating” Iraq.

OPEC+ is determined to revive oil prices after a long-standing feud due to member countries reneging on production reduction commitments. The vast alliance is in turmoil. Just one day before the rumored meeting date, OPEC+ urgently canceled the meeting that was supposed to discuss extending and deepening production cuts and boosting oil prices.

Jinshi Data has previously reported that according to people familiar with the matter, the two major oil-producing countries, Saudi Arabia and Russia, have become intolerable to the “cheating” behavior of another oil-producing giant, Iraq. Although the vast majority of oil-producing countries have implemented the previously allocated production reduction quota, Iraq once again violated its commitments.

The 23-country organization is facing key challenges. When the epidemic crisis swept the world, it was this organization that helped global oil prices achieve a big rebound. Saudi Arabia and Russia have warned that if Iraq and other countries, such as Nigeria and Kazakhstan, do not meet their production reduction obligations, they will begin to gradually lift measures to restrict supply, which have previously provided great support for the oil market.

Saudi Arabia and Russia are stepping up pressure on these countries that are lagging behind in the implementation of production cuts-the two countries not only require them to implement the promised production reduction quotas, but also require them to Production cuts will be deepened over several months to make up for the previously missing share.

Bob McNally, founder of the consulting firm Rapidan Energy Group and a former White House official, said:

“Saudi Arabia and Russia No joke, they’re going to implement some form of enforcement improvement mechanism. If that doesn’t work, they’re going to give it up.”

Iraq is not Possible compromise?

It is difficult for Iraq to accept this request. According to Bloomberg calculations, Iraq’s implementation rate of production cuts in May was less than half, so fully covering the gap means that it would need to further reduce production by 24%, reaching a reduction of about 3.28 million barrels per day.

This is a tall order for a country still rebuilding its economy after decades of war, sanctions and rebellion. With the oil market currently rebounding and oil prices rising to a high of nearly $40 per barrel, it is almost impossible to resist the temptation to sell oil for high profits. Although Iraqi Finance Minister and Acting Oil Minister Ali Allawi did promise to improve the implementation of production cuts through social media on Tuesday, he did not go further.

OPEC and its allies pledged in April to deepen production cuts to 9.7 million barrels per day, equivalent to reducing global oil supply by about 10%, to offset unprecedented demand under the epidemic blockade. collapse. Weeks later, Saudi Arabia pledged to cut production by an additional 1.2 million barrels per day in June.

According to people familiar with the matter, Saudi Arabia and Russia have now reached an agreement to extend the current production reduction plan by one month to July. But if they still cannot get guarantees from Iraq and other “cheating” countries at the next meeting (currently scheduled for June 9-10), their production cuts in the second half of the year will be relaxed to 7.7 million barrels per day.

The important responsibility of the Saudi oil minister: convincing stubborn cheaters

Since Abdulaziz was appointed Saudi Arabia’s energy minister, strengthening the implementation of production cuts by OPEC+ members has become a focus.

On his first public trip to Adul Dhabi since becoming energy minister last September, Abdul Aziz was warmly received for securing strong reparation commitments from Iraq and Nigeria. praise. However, his tenure was still full of ups and downs, and his actions caused a lot of controversy.

In March this year, Aziz attempted to force Russia to further deepen production cuts, but the result was a backlash, splitting the entire alliance and triggering a destructive price war. Two months ago, although he successfully brokered OPEC+ cooperation again and reached a record production reduction agreement, this agreement is now facing challenges again.

Now, a bigger problem lies before him: how to convince Iraq to comply with the production reduction agreement?

In fact, Iraq is notoriously stubborn. Iraq believes that exemptions from production cuts it has received since the conflict in the 1990s should continue. In addition, Iraq also has its own difficulties.

The Iraqi central government has very limited influence on the semi-autonomous Kurdish region (which produces up to 500,000 barrels of crude oil per day). At the important meeting announcing the establishment of OPEC+, the then Iraqi Oil Minister Ghabban had to leave the meeting room and ask the Prime Minister for approval to accept new production restrictions.

Nevertheless, recent experience shows that dealing with Iraq may not be as difficult as it seems, and Iraq’s resistance to production cuts can be overcome.

In December last year, Iraq was forced to accept additional production reduction quotas, although it barely completed most of the production reduction tasks earlier last year. Analysts at the time said Iraq knew no one expected it to fully implement the plan and that it viewed the new target as an incentive to increase its production cuts. Helima Croft, head of commodity strategy at RBC Capital Markets LLC, said:

“Once again, reductions.�Implementation issues complicate prospects for a short-term extension of the production-cut deal. However, we still believe that these issues can be resolved and plans to extend production cuts in the short term will be announced soon. ”</p

This article is from the Internet, does not represent Composite Fabric,bonded Fabric,Lamination Fabric position, reproduced please specify the source.https://www.tradetextile.com/archives/35403

Author: clsrich

 
Back to top
Home
News
Product
Application
Search