OPEC+, the coalition of oil-producing nations led by Saudi Arabia, agreed to keep its oil output targets unchanged amidst the softening trend in oil prices.
The decision, taken at a virtual meeting of the grouping on Sunday, is widely seen as a move against trying to stop the slide in prices with cuts to the world’s oil supply.
“In line with the decision of the OPEC and non-OPEC participating countries on 5 October 2022, which was purely driven by market considerations and recognised in retrospect by the market participants to have been the necessary and the right course of action towards stabilising global oil markets, and adhering to the approach of being proactive and pre-emptive, the participating countries reiterated their readiness to meet at any time and take immediate additional measures to address market developments and support the balance of the oil market and its stability if necessary,” read an OPEC statement following the meeting.
The statement said the participants also reaffirmed their decision to the adjustment of the frequency of the monthly meetings to become every two months for the Joint Ministerial Monitoring Committee (JMMC) and the authority of the JMMC to hold additional meetings, or to request an OPEC and non-OPEC ministerial meeting at any time to address market developments if necessary.
The participants also reiterated the critical importance of adhering to full conformity and compensation mechanisms taking advantage of the extension approved on the 33rd OPEC and non-OPEC ministerial meeting, the statement said.
The decision comes as oil markets wait to see how a slowing Chinese economy and a G7 price cap on Russian oil would affect demand and supply fundamentals.
Significantly, the move comes after the group’s decision in October to cut output by 2 million barrels per day raised a diplomatic firestorm from the Western quarters, especially from the US.
In a sharp reaction, President Joe Biden vowed to inflict “consequences” on Saudi Arabia, the most powerful member of the organisation.
Analysts said projections that the October cut would send gas prices soaring and generate an infusion of new cash for Russia to bankroll its war on Ukraine proved wrong.
Only weeks after the consortium announced the production cut, oil prices began dropping. Gasoline now costs less than it has in nine months, with consumers paying lower prices than they did just before Russia launched its invasion.
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