Iraq’s oil minister, Hayan Abdel-Ghani, has revealed that he does not expect OPEC+ to agree on further cuts to oil output at its next meeting scheduled for June 3-4. This is the first indication from an OPEC minister regarding a potential decision as oil prices slide amid fears of a global economic slowdown.
Abdel-Ghani, who spoke in an interview with foreign media for the first time since taking office last year, also said that Iraq could not reduce output any further. He noted that OPEC+ had already agreed to cut production in late 2022 to support the market when the economic outlook worsened, leading to lower prices.
However, in early April, Saudi Arabia and other OPEC+ members surprised the market by announcing an additional oil output cut of around 1.2 million barrels per day. This move helped boost oil prices significantly, but the gains have since been erased due to concerns over slowing global growth and rising oil inventories.
Now, as OPEC+ prepares for its upcoming meeting in Vienna, there is speculation about whether the group will extend or deepen its current production cuts. Some members, including Russia, have indicated that they are in favor of keeping the cuts in place, while others have voiced concerns about market share and compliance.
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Abdel-Ghani’s comments suggest that Iraq is unlikely to agree to any further cuts, which could complicate OPEC+’s decision-making process. Iraq, which is the group’s second-largest producer, has struggled to comply with its production quota under the current agreement and has asked for exemptions due to its ongoing conflict with ISIS and infrastructure constraints.
However, the minister acknowledged that the voluntary second cut announced by OPEC+ had been effective in stabilizing the market and boosting prices. He also emphasized the importance of cooperation among OPEC+ members in maintaining market stability and called on all parties to comply with the current agreement.
The upcoming OPEC+ meeting is expected to be closely watched by oil traders and investors, as any decision could have significant implications for global oil prices. Some analysts have suggested that OPEC+ may decide to extend the current production cuts until the end of the year or even deepen them by another 500,000 barrels per day. However, others have warned that such a move could lead to a loss of market share and put pressure on the group’s unity.
In the meantime, oil prices remain volatile and sensitive to news and data releases that could impact global demand and supply. The ongoing US-China trade dispute, geopolitical tensions in the Middle East, and the potential impact of US sanctions on Iranian oil exports are among the factors that could influence prices in the coming weeks.
Overall, the oil market is facing a complex and uncertain outlook, with multiple factors at play that could sway prices in either direction. As OPEC+ prepares for its next meeting, the world will be watching closely to see how the group navigates these challenges and whether it can maintain its role as a key player in the global oil market.
