On Sunday, OPEC and its allies held discussions surrounding potential adjustments to countries’ output quotas, leading to a possible additional cut in production. This new agreement aims to further reduce the total volume of production cuts to 4.66 million barrels per day, equating to approximately 4.5% of global demand. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia, supply around 40% of the world’s crude. According to sources, there were discussions surrounding additional production cuts, including 1 million barrels per day in addition to the existing 2 million barrels per day cut and the voluntary 1.6 million barrels per day cut. The voluntary cuts were unexpectedly announced in April and went into effect in May, resulting in a $9 increase per barrel and prices exceeding $87 per barrel. However, oil prices soon fell due to concerns regarding global economic growth and demand. During the meeting, OPEC+ also spoke about the methods to calculate baselines for 2023 and 2024, from which each member conducts their respective cuts.
In preparation for the meeting, the United Arab Emirates wanted a change in how their output cuts are measured. Bloomberg reported that if UAE were granted this change, it would come at the expense of African countries who were asked to give up some of their unused quotas. African countries were reluctant to accept this proposal, and therefore, tensions arose between them and UAE.
