What Price Does Each OPEC Member Need for Oil?

Statements from the oil ministers of OPEC member countries during the organization's preliminary meeting on Friday indicate that members did not reach a consensus on the need to reduce production. In a press conference held after the ministerial meeting on Friday, December 4, it was announced that there would be no change in OPEC's production ceiling as Iran's return to global oil markets remains uncertain. Bijan Namdar Zangeneh, Iran's oil minister, stated that the country will increase its production by one million barrels per day. "Even if the other members reduce their production shares, Iran is not willing to add even 500,000 barrels to its production or forgo the additional 500,000 barrels it already produces." He invited member countries to stop producing oil beyond their share, directly addressing Saudi Arabia. Meanwhile, Ali Al-Naimi, Saudi Arabia's oil minister, stated that the country is committed to producing 12.5 million barrels per day. He said that Iran's increase in oil production is not a concern, as international markets will "absorb" this increase. Iraq has also announced that it will raise its oil production to 4.5 million barrels per day, which is 300,000 barrels more than its current production. Currently, OPEC members produce over 31.5 million barrels per day, while the production ceiling is set at 30 million barrels per day. Bloomberg reported on Friday that the current oil price will pose challenges for most OPEC members in meeting their budgetary needs. The latest statements from OPEC members and analysts, as well as the required price for each member reported by the International Monetary Fund, are as follows: Algeria - required price per barrel: $96; OPEC share: 3.4%. Algeria's efforts to hold an emergency meeting in August were unsuccessful, and its request to non-OPEC producers to reduce production went unanswered. The country has supported Venezuela's proposal to hold a joint OPEC and non-OPEC meeting to raise prices. Angola - required price: $90; OPEC share: 5.6%. Angola's oil exports heavily depend on China, and any weakness in China's economy may cloud the future of Angola's oil exports. Ecuador - required price: $120; OPEC share: 1.7%. Ecuador's new oil minister, Carlos Pareja, has said that the country agrees with Venezuela's proposal for a five percent production cut, and OPEC must adhere to its collective production target. He described Thursday's meeting as "difficult" but expressed optimism about the results of Friday's meeting. Iran - required price: $87; OPEC share: 8.4%. Iran plans to increase its production by 500,000 barrels per day one week after sanctions are lifted and by one million barrels per day six months after sanctions. The country has requested OPEC to accommodate this increase within the framework of the 30 million barrels per day production ceiling. Bijan Zangeneh stated on Thursday that he is not ready to discuss quotas unless Iran's production fully returns to its previous level and will not agree to any cuts that bring its production below four million barrels, the pre-sanction level. He said that Thursday's meeting was "useful" despite the disagreements. Iraq - required price: $81; OPEC share: 13%. Iraq's production reached a record 4.4 million barrels per day in June, and its production has been over four million barrels per day for the past six months. Iraq and the U.S. have had the largest share of the global surplus this year. Analysts say this situation is unlikely to continue into 2016. Last month, the International Energy Agency stated that Iraq is struggling with prices below $50 and is engaged in a "costly war" with ISIS militants. Kuwait - required price: $67; OPEC share: 8.7%. According to Capital Economics, Kuwait is currently in the strongest position to cope with prolonged low oil prices due to its current account surplus. Despite Venezuela and other OPEC members' requests to cut supply, Kuwait has supported Saudi Arabia's view that the organization should not act alone to regulate the market. Libya - required price: $269; OPEC share: 1.3%. Libya, which has the smallest share in OPEC, has been unable to restore its production to 1.6 million barrels per day before the Arab Spring in 2011. Libya's production fluctuated between 250,000 and 850,000 barrels per day last year amid increasing rival government conflicts. RBC Capital Markets states that Libya is one of the "five fragile members" of OPEC at risk of instability and production stoppage in the current oil market. Nigeria - required price: $120; OPEC share: 6.3%. Emmanuel Ibe Kachikwu, Nigeria's oil minister, has stated that $40 oil is unacceptable and OPEC must implement a quota system. He said on November 21 that $60 per barrel is "more tolerable." He said on Thursday that it is still too early for Nigeria to propose a production cut. Qatar - required price: $55.5; OPEC share: 2%. Among member countries, Qatar has the lowest required price for its budget. Qatar's required price is still $10 above the current market price. Qatar's energy minister, Mohammed Al-Sada, has stated that there are signs of market improvement next year following a slowdown in supply growth from non-OPEC countries. Saudi Arabia - required price: $106; OPEC share: 32%. As the largest producer in OPEC, Saudi Arabia has increased its production in nine of the last eleven months as part of its strategy to maintain market share. The country reached a record 10.6 million barrels per day in July. However, Saudi Arabia is still not safe from price declines. Despite its $647 billion in foreign reserves, Standard & Poor's downgraded the country's rating in October due to its 80% revenue dependence, which exacerbates its budget deficit. The country dismissed reports that it might propose a one million barrel production cut as "baseless." The United Arab Emirates - required price: $73; OPEC share: 9.2%. Suhail Al-Mazrouei, the UAE's oil minister, stated on November 18 that OPEC should not be a shaky producer but rather a stable and low-cost supplier. Last month, Al-Mazrouei said he expects a "gradual correction" in prices next year. The UAE, like Saudi Arabia and Kuwait, has stated that OPEC should not act alone to regulate the market. Venezuela - required price: $125; OPEC share: 7.8%. After a sharp drop in prices, Venezuela is facing an economic crisis. The country has stated that if OPEC does not take action, prices could drop to around $20. Oil Minister Eulogio Del Pino quoted President Nicolas Maduro as saying that the country will propose to OPEC members to adhere to quotas and reduce production, including non-OPEC countries. Venezuela, which has the largest oil reserves in South America, relies on oil exports for 95% of its income. This is why traders closely monitor the country's stock prices in relation to oil prices. Meanwhile, Reuters quoted the Saudi oil minister as saying that global demand could absorb Iran's surge in oil production. The Iraqi oil minister also stated that Iran has the right to increase its production. In this context, Zangeneh called for a reduction of over one million barrels from OPEC's production, defending Iran's "right" to increase oil production, and highlighting the lack of consensus within OPEC on setting production limits.