In a tweet on the X platform (formerly Twitter), the OPEC secretariat “categorically refuted” the assertions made in the article published by the American newspaper, a few hours before the meeting of the Monitoring Committee OPEC (JMMc).
OPEC has refuted reports by the Wall Street Journal (WSJ) that Saudi Arabia’s energy minister warned OPEC+ members of a potential drop in the price of oil to $50 per barrel, if they did not respect the agreed production reductions. In a tweet on the OPEC (JMMc), considering that the information was “totally inaccurate and misleading”.
OPEC was responding to the author of the Wall Street Journal article, dated October 2, 2024, titled “Saudi Oil Minister Says Prices Could Fall to $50 a Barrel if Others Cheat, Reports Say sources”. The article “wrongly” reported, OPEC points out, that a conference call had taken place during which the Saudi Minister of Energy would have warned OPEC+ members of a potential drop in the price to 50 dollars per barrel if they do not respect the agreed production cuts. It also attributed an alleged quote to the minister, stating: “Some people would be better off keeping quiet and respecting their commitments to OPEC+.” These allegations are completely unfounded, writes OPEC.
The OPEC Secretariat further highlights that no such conference call took place last week, and no such call or video conference has taken place since the last OPEC+ meeting on September 5. “The alleged statements, attributed to anonymous sources, lack credibility and are completely fabricated.” The OPEC secretariat emphasizes that “its meetings, whether held in person or by teleconference, are always conducted in a civil and respectful manner. “It is therefore deeply worrying that the WSJ would publish such a report, which not only lacks journalistic integrity and professionalism, but also demonstrates a blatant disregard for the respect owed to OPEC+ ministers.”
The American media wrote: “The warning from the most influential minister in the OPEC+ alliance was interpreted by other producers as a veiled threat that Saudi Arabia has had enough of quota cheats and could embark on a price war to defend its market share, the newspaper’s sources indicated.
The Saudi minister’s message “was that there is no point in adding more barrels if there is no room for them on the market,” a delegate who attended the call told the Journal. last week,” added the media. Information which is, according to OPEC, without any basis.
The Financial Times had insisted, for its part, in an article published a few days before the WSJ article to which OPEC responded, on a supposed desire of Saudi Arabia to abandon a strategy based on prices, for a strategy nibbling market share. The British media reported that Saudi Arabia “was ready to abandon its unofficial price target of $100 per barrel for crude oil as it prepares to increase its production”, signaling that it is resigned to a prolonged period of lower oil prices.
OPEC+ maintains its strategy
The scenario evoked by the media recalls a dark episode experienced by oil producers a few years ago, when the fight for market share began, leading to a disastrous impact on prices. The two articles cited above were published when the market had been bearish for several weeks – before the recent rebound triggered by the situation in the Middle East.
The Wall Street Journal had indicated, in another article published recently, that “prospects of increasing OPEC+ crude production were emerging in the near future, which would influence prices”. Successive information abounds in the same direction and suggests a probable “derailment” of the OPEC strategy in a context of falling prices – despite solid fundamentals, according to OPEC analyzes – and moreover in a geopolitical context very tense, which disrupts OPEC’s efforts to maintain its cohesion and ensure adequate supply with a view to regulating the market and stabilizing prices.
During their last meeting in early October 2024, ministers who are members of the Joint Ministerial Monitoring Committee (JMMC) of the Organization of the Petroleum Exporting Countries and its non-OPEC allies emphasized “their crucial commitment to achieving full compliance”. According to a statement from the Ministry of Energy and Mines, JMMC members exchanged “constructive views on the short-term outlook for the oil market.”
The Minister of Energy and Mines notably recalled that “since the beginning of the summer, the market has been marked by excessive volatility, persistent concerns about global economic growth, and a notable slowdown in demand for products. oil, even though global stocks remain high and the oil market remains adequately supplied. The minister announced that “JMMC members agreed to maintain close contact, continue to regularly exchange views and remain particularly attentive to developments likely to affect market fundamentals over the coming weeks.”
During the meeting, “the Republic of Iraq, the Republic of Kazakhstan and the Russian Federation confirmed that they have achieved full compliance and full compensation in accordance with the submitted schedules for September. The three countries reiterated their strong commitment to maintaining full compliance and compensation throughout the remaining term of the agreement.
Mohamed Arkab had underlined in this regard that “the JMMC observed with satisfaction that a large majority of OPEC+ countries fully respect the required production levels”, while emphasizing “the importance, for all signatory countries of the Declaration of cooperation, to continue their efforts and to compensate for the surplus produced during previous months.
OPEC+ is cutting production by a total of 5.86 million barrels per day (bpd), or around 5.7% of global demand, in a series of agreed measures since the end of 2022. It plans an increase of 180 000 bpd in December, as part of a gradual unwinding of its latest round of voluntary cuts over 2025. The hike which was due to start in October was delayed by two months due to falling prices.
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