Saudi Arabia will pledge new voluntary production cuts as part of a broader OPEC+ output-limiting deal, sources told Reuters, as the group faces flagging oil prices and a looming supply glut.
The group, known as OPEC+, delayed the start of formal talks by over six hours due to members’ discussions of production baselines, from which cuts and quotas are calculated, sources said.
Two separate OPEC+ sources said the group was likely to agree a policy roll over for 2023 and make additional cuts in 2024 if new production baselines for members are agreed. It was not clear when Saudi cuts would begin.
OPEC’s most influential members and biggest Gulf producers led by Saudi Arabia were trying to persuade under-producing African nations such as Nigeria and Angola to have more realistic output targets, sources said.
“Talks with African producers are proving to be difficult,” one OPEC+ source said. Gulf producer, the United Arab Emirates, was meanwhile seeking a higher baseline to reflect its growing production capacity, sources said.
OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, pumps around 40% of the world’s crude, meaning its policy decisions can have a major impact on oil prices.