The world’s largest oil producers are set to meet in Algiers this week to discuss ways to stabilise oil prices and end oversupply.
However, hopes remain low regarding any potential agreement on supply cuts as members of the Organisation of Petroleum Exporting Countries (OPEC) continue to disagree over the path to follow.
In the meantime, while some say this is merely an informal meeting to set the basis for the next official meeting, the Algerian oil minister Noureddine Boutarfa recognises there could be a significant outcome.
OPEC: Oil Prices Debated This Week
Saudi Arabia already said it will cooperate with the condition that Iran agrees to cut down its oil production to at least 3.6 million barrels per day (bpd). However, Iran seems determined to reach the 4 million bpd level.
Still, the two countries have met last week to go over their plans, which is already a sign that the times are changing.
Expectations are low for OPEC to reach an agreement
Looking at their production levels, it could also mean that everything will remain the same, as Saudi Arabia has shown an increase to a record 10.6 million bpd, Iran to nearly 3.8 million bpd and even Russia, above 11 million bpd.
OPEC Should Urgently Reach an Agreement
According to the Algerian minister, talks have reached “a critical point” because, if OPEC members and non-members fail to reach an agreement, prices could be hit further.
As such, he is urging Saudi Arabia to show “responsibility” and said he was confident that a deal could be possible, especially as Iran will be present at the meeting, he told media sources.
According to the minister, OPEC members are losing between US$300 million and US$500 million per day with the downfall in oil prices, hence the urgency of reaching an agreement.
Algeria is pressuring OPEC to cut its production by around one million barrels per day.
Prices have stayed at around $50 per barrel following the 2014 crash, when prices fell from over $100.