The producers are considering a range of output cutbacks, including a reduction by as much as 1 million barrels a day, according to delegates. A technical committee representing the coalition projected on Saturday a global oil surplus will resurface in 2019 if they continue to produce at current rates, according to delegates familiar with its conclusions.
Saudi Arabia’s Energy Minister Khalid al-Falih – representing OPEC’s biggest member –has said the Organization of Petroleum Exporting Countries may need to reduce production as oil markets could return to oversupply next year.
Two sources told Reuters on Sunday that Saudi Arabia is discussing a proposal that could see OPEC and non-OPEC oil producers cut output by up to 1 million barrels per day.
At least three countries which are members of the Joint Ministerial Monitoring Committee consider that it’s necessary to discuss the possibility of output cuts in 2019, according to delegates.
The sources said any such deal would depend on factors including the level of Iranian exports after the United States imposed sanctions on Tehran but granted Iran’s top oil buyers waivers to continue buying oil.
Riyadh was surprised by the waivers granted to customers such as China and India, a move which hit oil prices, at least three industry and OPEC sources told Reuters.
Now Saudi Arabia wants to act to prevent a further slide in prices which fell below $70 a barrel on Friday, and is leading discussions on cutting oil output next year, the sources said.
Russia, however, signaled on Sunday it did not believe the oil market would face serious oversupply next year.
Russian Energy Minister Alexander Novak told reporters the market might face a certain seasonal oversupply in the next few months but by mid-2019 it should be balanced and demand may even exceed supply.
Bloomberg also contributed to this story.