OPEC is on red alert over escalating US-Iran tensions that have fuelled strong oil-price gains — but the cartel and other crude-producing nations are unlikely to end output cuts at a meeting on Tuesday, traders say.
The Organisation of the Petroleum Exporting Countries, a cartel of 14 countries pumping one third of the world’s oil, is acutely aware that a faltering global economy is sapping growth in crude demand, helping to offset fears of potential supply disruptions in the Middle East.
Ministers from OPEC’s member-nations meet in Vienna on Monday, before gathering a day later for the OPEC+, a group of 24 oil-producing countries that includes major crude supplier Russia.
Russian President Vladimir Putin, speaking on the sidelines of the G20 summit in Japan, insisted that oil producers would seek in Vienna to safeguard output “stability”.
“We believe that our production stabilisation agreements... Have had a positive effect,” Putin told the Financial Times in remarks published Friday.
The cartel and its oil-producer nation allies opted in December to trim daily crude output by 1.2 million barrels owing to abundant world supplies.
The reduction however contributed to oil prices soaring by almost one-third in the first quarter of 2019, with European benchmark contract Brent crude currently trading at about $66 per barrel, up seven percent since the last meeting.
Oil futures have jumped in recent weeks also on the US-China trade war — but mainly owing to supply fears linked to the fast-developing crisis between Tehran and Washington.