Eight OPEC+ alliance members move toward output hike at meeting
But in a policy shift, eight alliance members spearheaded by Saudi Arabia surprised markets by announcing they would significantly raise production from May, sending oil prices plummeting.
Oil prices have been hovering around a low $65-$70 per barrel.
Representatives of Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman will take part in Saturday's meeting, expected to be held by video.
Analysts expect the so-called "Voluntary Eight" (V8) nations to decide on another output increase of 411,000 barrels per day (bpd) -- the same target approved for May, June and July.
The group has placed an "increased focus on regaining market shares over price stability," said Saxo Bank analyst Ole Hansen.
Enforcing quotas
The group will likely justify its decision by officially referring to "low inventories and solid demand as reasons for the faster unwind of the production cuts", UBS analyst Giovanni Staunovo told AFP.
But the failure of some OPEC member countries, such as Kazakhstan and Iraq, to stick to their output quotas, is "a factor supporting the decision", he added.
By approving another output hike, heavyweight Saudi Arabia might seek to up pressure on members for not keeping to agreed quotas via slashing expected oil profits due to lower prices.
According to Jorge Leon, an analyst at Rystad Energy, an output hike of 411,000 bpd will translate into "around 250,000 or 300,000" actual barrels.
An estimate by Bloomberg showed that the alliance's production increased by only 200,000 bpd in May, despite doubling the quotas.
No effect from Israel-Iran war
Analysts expect no major effect on current oil prices, as another output hike is widely anticipated.
The meeting comes after a 12-day conflict between Iran and Israel, which briefly sent prices above $80 a barrel amid concerns over a possible closing of the strategic Strait of Hormuz, a chokepoint for about one-fifth of the world's oil supply.
As fears of a wider Middle East conflict have eased, and given there "were no supply disruptions so far", the war is "unlikely to impact the decision" of the alliance, Staunovo added.
The Israel-Iran conflict "if anything supports a continued rapid production increase in the unlikely event Iran's ability to produce and export get disrupted," Hansen told AFP.
© 2025 AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
France 24
18 hours ago
- France 24
BRICS nations voice 'serious concerns' over Trump tariffs
Emerging nations, which represent about half the world's population and 40 percent of global economic output, are set to unite over "serious concerns" about US import tariffs, according to a draft summit statement obtained by AFP. Since coming to office in January, Trump has threatened allies and rivals alike with a slew of punitive duties. His latest salvo comes in the form of letters informing trading partners of new tariff rates that will soon enter into force. The draft summit declaration does not mention the United States or its president by name. But it is a clear political shot directed at Washington from 11 emerging nations, including Brazil, Russia, India, China and South Africa. "We voice serious concerns about the rise of unilateral tariff and non-tariff measures which distort trade and are inconsistent with WTO (World Trade Organization) rules," the draft text says. It warns that such measures "threaten to further reduce global trade" and are "affecting the prospects for global economic development." Xi no show Conceived two decades ago as a forum for fast-growing economies, the BRICS have come to be seen as a Chinese-driven counterbalance to Western power. But the two-day summit's political punch will be depleted by the absence of China's Xi Jinping, who is skipping the annual meeting for the first time in his 12 years as president. "I expect there will be speculation about the reasons for Xi's absence," said Ryan Hass, a former China director at the US National Security Council who is now with the Brookings Institution think tank. "The simplest explanation may hold the most explanatory power. Xi recently hosted Lula in Beijing," said Hass. The Chinese leader will not be the only notable absentee. War crime-indicted Russian President Vladimir Putin is also opting to stay away, but will participate via video link, according to the Kremlin. Hass said Putin's non-attendance and the fact that Indian Prime Minister Narendra Modi will be a guest of honor in Brazil could also be factors in Xi's absence. "Xi does not want to appear upstaged by Modi," who will receive a state lunch, he said. "I expect Xi's decision to delegate attendance to Premier Li (Qiang) rests amidst these factors." Still, the Xi no-show is a blow to host President Luiz Inacio Lula da Silva, who wants Brazil to play a bigger role on the world stage. In the year to November 2025, Brazil will have hosted a G20 summit, a BRICS summit, and COP30 international climate talks, all before heading into fiercely contested presidential elections next year, in which he is expected to run. Iran's President Masoud Pezeshkian, whose nation is still reeling from a 12-day conflict with Israel, is also skipping the meeting. A source familiar with the negotiations said the BRICS countries were divided over how to respond to the wars in Gaza and between Iran and Israel. Iranian negotiators were pushing for a tougher collective stance that goes beyond referencing the need for the creation of a Palestinian state and for disputes to be resolved peacefully. But one diplomatic source said the text would give the "same message" that BRICS delivered in June when Iran was being bombed by Israel and the United States, expressing "concern." Artificial intelligence and health will also be on the agenda at the summit. Original members of the bloc Brazil, Russia, India, and China have been joined by South Africa and, more recently, by Saudi Arabia, Iran, the United Arab Emirates, Egypt, Ethiopia and Indonesia.
France 24
a day ago
- France 24
Afghans both hopeful, disappointed after Russia's Taliban recognition
Russia became the first country to acknowledge the Taliban authorities on Thursday, after a gradual building of ties that included removing their "terrorist organisation" designation and accepting an ambassador in recent months. The Taliban authorities had not been recognised by any state in the nearly four years since sweeping to power in 2021, ousting the foreign-backed government as US-led troops withdrew after a two-decade war. Afghanistan is one of the poorest countries in the world and in a fragile recovery from four decades of conflict. "With the current situation in Afghanistan, with all the challenges, everyone is worried. If the world recognises Afghanistan, we will be happy, currently, even the tiniest thing matters," Gul Mohammad, 58, said on Friday in the capital Kabul. Despite having bitter memories of the Soviet invasion of Afghanistan in 1979, when he "lost everything" and became a refugee in Pakistan, he acknowledges that "the priorities are different now". Jamaluddin Sayar, 67, predicted that "trade and economic prosperity will now blossom". The retired pilot said other countries, "both western and eastern", should recognise the government and "stop spreading propaganda against the Islamic Emirate", using the Taliban authorities' name for their administration. Won't 'lead to anything' Russian and Afghan officials praised the move as an opening for deeper cooperation, notably in economic and security arenas. Security concerns have been a key avenue for coordination between the Taliban authorities and the international community, amid fears Afghanistan would become fertile ground for increased militant activity. The authorities have prioritised security and made repeated assurances that Afghan soil would not be used by any group to plan attacks on other nations. However, Pakistan's ties with the Taliban authorities have been strained over a surge in militant activity since their takeover and last year, an attack claimed by the Islamic State group's branch in Afghanistan killed 137 people in a Moscow concert hall. In a country where dissent and protest is tightly controlled, some Kabul residents were afraid to openly criticise the Taliban authorities. Atef, not his real name, was unconvinced better relations between Afghanistan and Russia would improve the livelihoods of ordinary Afghans. "I think Afghanistan will fall into the traps of the Russians again, the issues and challenges will increase, and there is nothing that can help ordinary people," the unemployed 25-year-old said. "People are struggling, and they will still struggle with or without the recognition." For Afghan women's rights activists, particularly those who have advocated for isolating the Taliban government, the recognition was seen as a setback that "legitimises" restrictions on women. The Taliban authorities, who also ruled the country between 1996 and 2001, have again imposed an austere version of Islamic law. Norway-based Afghan women's rights activist Hoda Khamosh was defiant against the impact of the Russian move. "Human rights organisations right now are trying to recognise gender apartheid in Afghanistan because the Taliban are a repressive regime against women," she said.
France 24
a day ago
- France 24
Eight OPEC+ alliance members move toward output hike at meeting
The wider OPEC+ group -- comprising the 12-nation Organization of the Petroleum Exporting Countries (OPEC) and its allies -- began output cuts in 2022 in a bid to prop up prices. But in a policy shift, eight alliance members spearheaded by Saudi Arabia surprised markets by announcing they would significantly raise production from May, sending oil prices plummeting. Oil prices have been hovering around a low $65-$70 per barrel. Representatives of Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman will take part in Saturday's meeting, expected to be held by video. Analysts expect the so-called "Voluntary Eight" (V8) nations to decide on another output increase of 411,000 barrels per day (bpd) -- the same target approved for May, June and July. The group has placed an "increased focus on regaining market shares over price stability," said Saxo Bank analyst Ole Hansen. Enforcing quotas The group will likely justify its decision by officially referring to "low inventories and solid demand as reasons for the faster unwind of the production cuts", UBS analyst Giovanni Staunovo told AFP. But the failure of some OPEC member countries, such as Kazakhstan and Iraq, to stick to their output quotas, is "a factor supporting the decision", he added. By approving another output hike, heavyweight Saudi Arabia might seek to up pressure on members for not keeping to agreed quotas via slashing expected oil profits due to lower prices. According to Jorge Leon, an analyst at Rystad Energy, an output hike of 411,000 bpd will translate into "around 250,000 or 300,000" actual barrels. An estimate by Bloomberg showed that the alliance's production increased by only 200,000 bpd in May, despite doubling the quotas. No effect from Israel-Iran war Analysts expect no major effect on current oil prices, as another output hike is widely anticipated. The meeting comes after a 12-day conflict between Iran and Israel, which briefly sent prices above $80 a barrel amid concerns over a possible closing of the strategic Strait of Hormuz, a chokepoint for about one-fifth of the world's oil supply. As fears of a wider Middle East conflict have eased, and given there "were no supply disruptions so far", the war is "unlikely to impact the decision" of the alliance, Staunovo added. The Israel-Iran conflict "if anything supports a continued rapid production increase in the unlikely event Iran's ability to produce and export get disrupted," Hansen told AFP. © 2025 AFP
