VIENNA: Opec and its allies began two days of meetings on Saturday that may culminate in further production cuts of as much as 1 million barrels per day, Opec+ sources told Reuters, as the group faces flagging oil prices and a looming supply glut.

Opec+, which groups the Organisation of the Petro­leum Exporting Countries and allies led by Russia, pumps around 40 per cent of the world’s crude, meaning its policy decisions can have a major impact on oil prices.

Three Opec+ sources told Reuters on Friday that cuts were being discussed among options for Sunday’s session. Two other sources said additional cuts were unlikely.

Opec held a separate brief meeting on Saturday but ministers made no comment on possible policy decisions afterwards.

The three sources said cuts could amount to 1 million bpd on top of existing cuts of 2mbpd and voluntary cuts of 1.6mbpd, anno­u­nced in a surprise move in April and which took effect in May. If approved, this would take the total volume of reductions to 4.66mbpd, or around 4.5pc of global demand.

“This number is premature, we didnt go into these things (yet),” Iraq’s oil minister Hayan Abdel-Ghani said prior to the meetings, when asked about a possible cut of 1mbpd.

Typically production cuts take effect the month after they are agreed, but ministers could also agree a later implementation. They could also decide to hold output steady.

Western nations have accused Opec of manipulating oil prices and undermining the global economy through high energy costs. The West has also accused Opec of siding too much with Russia despite West­ern sanctions over Moscow’s invasion of Ukraine.

Published in Dawn, June 4th, 2023