OPEC+ leader Saudi Arabia is pushing the alliance to talk about restoring more oil production earlier than its scheduled return at the end of next year in an attempt to recapture market share, sources familiar with the issue stated.
Senior members of the alliance will hold a video conference call on Sunday that will debate the destiny of a 1.66 million barrels a day slice of paused supplies, having just sped up the resumption of an earlier layer over the past five months. Brent oil futures fell as much as 2.4%
No decision has been made, and it is unclear if any increase would be agreed as soon as Sunday or only in coming months, some of the people said. Saudi Arabia, which led the accelerated restart in a bid to recapture global market share, is eager to pump more as it seeks to offset lower prices with higher volumes, they said. Any suggestion to raise output may face resistance from other members eager to support prices.
If it does, such a move would be a dramatic OPEC+ strategic shift towards defending market share instead of prices, piling pressure on some member nations, especially those unable to produce more. Saudi Arabia's Crown Prince Mohammed bin Salman visits Washington in November to see President Donald Trump, who has called for lower pump prices.
A range of options remains on the table, including pausing hikes for some time, the sources involved. The Saudis and Russia jointly lead the OPEC+ group.
Organization of the Petroleum Exporting Countries representatives have said the Saudis are eager to recover sales volumes lost to rivals like US shale drillers.
OPEC+ will keep adding barrels, ahead of yearly demand growth," Eurasia Group managing director for energy, climate and resources Henning Gloystein wrote in a note. "The producer group is resolved to regain market share," even if actual increases will be less than the volumes promised.
Saudi Arabian authorities were not available for comment outside the country's normal office hours.
More output increases OPEC+ danger of deepening a fourth-quarter surplus anticipated by forecasters like the International Energy Agency, adding to downward pressure on prices. Regardless of this, oil futures - which initially dropped when the group began unwinding its 2.2 million bpd of shut-in supply in April - have actually increased since.
While more oil would be a boon for consumers and a win for Trump, it's a financial gamble for producers from the US shale industry to OPEC+ members themselves.
Trump. has called for lower prices to ease the cost of living and rein in inflation as he pressures the Federal Reserve to reduce interest rates. The president also added that more gentle prices will allow him to pressure Russia to end its conflict with Ukraine.
Sunday's gathering is a part of the countries' regular monthly meetings to talk over oil market and adherence to the existing supply curbs.