OPEC's Got to Play the Coronavirus Waiting Game
The pandemic and rising oil output it can't control means the cartel and its allies will have to postpone easing output cuts. But for how long?
Saudi Arabia's energy minister deserves much credit for OPEC+ compliance.
Photographer: Bloomberg/BloombergThe Organization of Petroleum Exporting Countries and its allies meet at the end of the month to decide the future of their record output cuts that helped put a floor under oil prices. Hopes had been high they could ease their restraint, but headwinds to the recovery in oil demand and rising production from countries outside their control mean they’ll have to wait.
Under the deal reached over several days of fractious meetings in April, the 23 OPEC+ countries agreed to reduce production by an initial 9.7 million barrels a day before tapering those cuts in two steps. The first easing of the cuts, originally scheduled for July, was pushed back to August. Now the second one, due at the start of January, will almost certainly be deferred.