Upcoming OPEC meeting - test of Saudi Arabia’s leadership in cartel
The upcoming OPEC meeting, to be held June 22 in Vienna, is a test of Saudi Arabia’s leadership in the cartel, Gal Luft, the co-director of the Washington-based Institute for the Analysis of Global Security, told Trend.
"The upcoming meeting will be one of the most difficult ones. It will be painfully difficult for the Saudis to convince fellow OPEC members to ramp up production and risk price collapse. This is especially true since some of the cash strapped and politically embattled members simply cannot pump more oil even if the quotas allowed them to do so," he said.
The expert noted that the situation in Venezuela and Libya is weighing on members' considerations, giving fodder to those who wish to dampen prices.
"The meeting will indeed be a test of Saudi Arabia’s leadership in OPEC. If there is a quota increase it will be a meager one. I expect prices to be more influenced by global economic trends like the situation in the Eurozone than by OPECs price fixing efforts with the only game changer being a possible restoration of the sanctions on Iran," Luft believes.
Earlier, OPEC and several other non-OPEC producers reached an agreement to extend the production deal for a further nine months. This would shift the expiration date of the agreement from March to the end of 2018. The agreement is on the same terms as those agreed in November last year.
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