OPEC+ Ministers’ Meeting Overview

By Alex Lawler, Ahmad Ghaddar and Maha El Dahan

LONDON/DUBAI (Reuters) – An OPEC+ ministerial panel scheduled to meet on Wednesday is unlikely to recommend any changes to policy, allowing the group to start gradually increasing production from December, two sources told Reuters.

Ministers from the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+, will hold an online joint ministerial monitoring committee (JMMC) at 1200 GMT.

The two sources, who declined to be identified, indicated that Wednesday’s meeting is unlikely to bring any surprises. One source stated it will reaffirm the need for member countries to comply with their production targets under the deal.

International oil prices fell below $70 a barrel in September for the first time since late 2021 but have since rallied, rising around 5% to above $75 this week. This increase was sparked by concerns over a potential escalation in the Middle East after Iran’s major military attack against Israel, which could disrupt crude output from the region.

OPEC+ is currently cutting output by 5.86 million barrels per day (bpd), about 5.7% of global demand, following a series of agreements since late 2022. A planned 180,000 bpd increase in December marks a gradual unwinding of the latest layer of voluntary cuts until 2025, with the increase delayed from October due to falling prices.

The focus at the upcoming meeting will be on compliance, particularly from Iraq and Kazakhstan, which have pledged compensation cuts of 123,000 bpd in September and larger cuts in subsequent months due to previous over-production.

An OPEC+ source noted that clarity on whether the compensation cuts were achieved in September will determine if the December increase proceeds. Meanwhile, if compliance is lacking, Saudi Arabia and other nations could accelerate the unwinding of their cuts from December, analysts suggest.

Helima Croft of RBC Capital stated, “If they fail to comply, we can envision a swifter sunsetting of the voluntary cuts.”

The JMMC, consisting of oil ministers from Saudi Arabia, Russia, and other leading producers, typically meets every two months and can recommend policy changes.