OPEC+ Flashcards
Why in News?
OPEC+ will hold its meeting on Oct. 5 in person in Vienna, an OPEC source told Reuters on Saturday.
A virtual option will also be available for some delegations due to the short notice if they are unable to.
OPEC+, which combines OPEC countries with allies such as Russia, is meeting against a backdrop of falling prices from multi-year highs hit in March and severe market volatility.
Sources have told Reuters talks on an oil output cut are focussing on a potential reduction of 500,000 barrels per day to 1 million bpd to support the market.
A virtual option will also be available for some delegations due to the short notice if they are unable to.
OPEC+, which combines OPEC countries with allies such as Russia, is meeting against a backdrop of falling prices from multi-year highs hit in March and severe market volatility.
Sources have told Reuters talks on an oil output cut are focussing on a potential reduction of 500,000 barrels per day to 1 million bpd to support the market.
Earlier this week, a source familiar with Russian thinking said Moscow could suggest a cut of up to 1 million bpd, while an OPEC source put the likely figure closer to 500,000 bpd. Talks are expected to continue ahead of the meeting.
THE MEETING COMES IN THE BACKDROP OF FALLING PRICES FROM MULTI-YEAR HIGHS.
OPEC+
The 23-nation group has not met in person since March 2020
#It’s still unclear if Russia will send any representatives
- The 23-nation alliance, led by Saudi Arabia and Russia.
OPEC plus countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan. The non-OPEC countries which export crude oil are termed as OPEC plus countries. - The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental organization, created at the Baghdad Conference in 1960, by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
- It aims to manage the supply of oil in an effort to set the price of oil in the world market, in order to avoid fluctuations that might affect the economies of both producing and purchasing countries.
It is headquartered in Vienna, Austria.
OPEC membership is open to any country that is a substantial exporter of oil and which shares the ideals of the organization.
Gabon terminated its membership in January 1995. However, it rejoined the Organization in July 2016.
As of 2019, OPEC has a total of 14 Member Countries viz. Iran, Iraq, Kuwait, United Arab Emirates(UAE), Saudi Arabia, Algeria, Libya, Nigeria, Gabon, Equatorial Guinea, Republic of Congo, Angola, Ecuador and Venezuela are members of OPEC.
IEA
Earlier, According to the International Energy Agency (IEA), the Organisation of the Petroleum Exporting Countries (OPEC+) plus might face sharp demand fall due to a recent surge in crude oil production from the countries like USA, Norway, and Guyana.
IEA
#The International Energy Agency (IEA) is an autonomous organisation which works to ensure reliable, affordable and clean energy.
#It was established in the wake of 1973 (set up in 1974) oil crisis after the OPEC cartel had shocked the world with a steep increase in oil prices.
#It is headquartered in Paris, France
#The IEA has four main areas of focus, i.e. 4Es:
Energy security,
Economic development,
Environmental awareness and
Engagement worldwide.
#India became an associate member of the International Energy Agency in 2017.
#Mexico officially became the International Energy Agency’s 30th member country in February 2018, and its first member in Latin America.
23NATIONS
The 13-nation Organization of Petroleum Exporting Countries entered into a partnership with 10 other major producers in 2016, including Russia. Saudi Arabia is keen to preserve that relationship, which it sees as crucial to stabilizing oil markets, despite pressure from the US and Europe for Russia to be isolated because of its invasion.
OPEC+ underscored its readiness to steady the market with a symbolic reduction at a previous meeting on Sept 5. Saudi Energy Minister Prince Abdulaziz bin Salman promised the same day to remain “preemptive and pro-active” in addressing extreme price volatility.
US sanctioned Alexander Novak, Russia’s deputy prime minister and point-person for OPEC+, following Moscow’s annexation of four regions in Ukraine. The EU is expected to impose new sanctions of its own, though it’s unclear if they’ll target Russian individuals.
BANK’s STATEMENT
Brent crude soared above $125 a barrel following Russia’s invasion of Ukraine in February. It’s since dropped to $85 as central banks raise interest rates to fight inflation and economies from the US to China slow, tempering the spectacular windfall enjoyed by the Saudis and their partners.
Banks including JPMorgan Chase & Co. said OPEC+ may need to lower output by least 500,000 barrels a day to stabilize prices. Helima Croft, chief commodities strategist at RBC Capital Markets LLC, has said the group may opt for a cut twice that large.
