Consensus on Maintaining Production Ceiling Announced Ahead of OPEC Meeting

Ahead of the 167th OPEC meeting, the Organization of the Petroleum Exporting Countries, Reuters reported, citing a senior member of the organization, that there is a consensus among members to maintain the production ceiling at this meeting. According to Reuters, this senior OPEC member, representing one of the Arab oil-producing countries on the southern shore of the Persian Gulf, stated: 'No one wants to rock the boat. This week's OPEC meeting is expected to be like a smooth and calm sailing.' The report published on Wednesday, June 3, indicates that OPEC members agree to maintain the current production ceiling for the coming months. It notes that while global demand for oil has somewhat improved and global prices have increased by $20 since January to about $65, OPEC members' willingness to impose restrictions on the production ceiling has decreased. Global oil prices were above $105 in the first half of last year but began to decline in the second half. Meanwhile, the Iranian Students' News Agency (ISNA) quoted Abdullah al-Badri, the Secretary-General of OPEC, emphasizing that 'we have seen positive signs in the oil market.' Ali al-Naimi, the Saudi oil minister, also stated on Tuesday, before the start of the 167th OPEC meeting in Vienna, Austria, that 'OPEC's strategy of not reducing oil production to protect market share is paying off.' Upon arriving in Vienna for the Wednesday OPEC meeting, the Saudi oil minister described the strategy of maintaining OPEC's production level as 'effective' and noted: 'Demand is increasing and supply is decreasing. This is a reality. The market is stabilizing, and I am happy about this.' Adel Abdul-Mahdi, the Iraqi oil minister, also spoke similarly about signs of improvement in the oil market. However, Bijan Namdar Zangeneh, the Iranian oil minister, in an interview with the Iranian News Agency, pointed to the excess supply in global markets, stating: 'The excess supply of oil is putting pressure on prices.' Zangeneh also deemed the consensus among members to appoint a new OPEC Secretary-General as 'unlikely.' Previously, Mehdi Asali, the director of OPEC affairs and relations with energy organizations, had reported a surplus of 2.4 million barrels of oil in the market and stated: 'The reduction of production by countries that have increased production during this time due to the relative absence of Iran and some OPEC members will be discussed at this week's OPEC meeting.' The current production ceiling of OPEC is 30 million barrels per day, but according to OPEC's monthly statistics, member countries produced 30.843 million barrels per day in April. Meanwhile, according to OPEC's own assessment, the organization's oil needs this year will be 29.3 million barrels per day. In other words, member countries are producing more than 1.5 million barrels per day above global demand. OPEC oil ministers will gather on Friday to decide on the production levels for the next six months in Vienna, Austria, during the 167th meeting of the organization, while the sixth seminar of the organization will also be held simultaneously.