17th OPEC and non-OPEC Ministerial Meeting to take place
Energy ministers from the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC (OPEC+) countries will meet today to discuss the state of the global oil market.
At the most recent OPEC+ meeting on April 27th, oil producing countries demonstrated a high level of compliance with demand-induced production adjustments, hovering at a combined 115% of desired output volume in March of this year. However, disagreements between Saudi Arabia and Russia have hindered implementation of a cohesive production policy.
Expect today’s meeting to reaffirm their commitment to supporting the decision made last year to collectively reduce crude oil production. In the short-term, oil is projected to continue recovering from the demand shock of the COVID-19 pandemic, though more slowly in the second half of the year. However, a resurgence of COVID-19 cases in oil-consuming states could slow the economic growth of afflicted countries, threatening oil price stability.
In the long-term, oil-producing countries will need to address widespread commitments from several of the largest oil-consuming nations to achieve net-zero emissions by 2050. As the International Energy Agency warned of a possible 75% reduction of oil revenues by the 2030s, heavily oil-reliant and politically-volatile states like Iraq and Libya are likely to experience further destabilization in the years to come.
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