The world’s top oil exporter, Saudi Arabia, is expected to extend its additional voluntary supply cuts to at least the first quarter, if not the first half of 2024, Amrita Sen, co-founder of consultancy Energy Aspects said on Wednesday.
Current oil prices are not low enough to push the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, to deepen supply cuts in 2024, she said, adding that market fundamentals are not weak enough to warrant that.
The next OPEC+ ministerial meeting will be held on Nov. 26 to discuss the market outlook.
Brent prices slipped just under $82 a barrel on Wednesday, depressed by concerns about economic growth and demand, despite support from supply cuts by OPEC and its allies and conflict in the Middle East.
The International Energy Agency (IEA) on Tuesday raised its oil demand growth forecasts for this year and next despite slower economic growth in nearly all major economies.
Washington has lifted sanctions on Venezuela, which is expected to improve heavy oil supplies to the U.S. and Europe at the expense of China, while oil from Russia and Iran continued to be exported despite sanctions.
“The problem still remains the underlying dichotomy with U.S. policies,” Sen said at the FT Asia Commodities Summit in Singapore.
“They do want to reduce revenues for Russia without disrupting flows.”
The U.S. Treasury Department sent notices on Friday to ship management companies requesting information about 100 vessels it suspects of violating Western sanctions on Russian oil, Reuters reported on Monday.
The move represents the biggest step of its kind by the United States since Washington and its allies imposed a price cap aimed at restricting oil revenues in response to Moscow’s invasion of Ukraine.
For Iran, production has gone up by about 600,000 barrels per day, said Energy Aspects’ Sen. The OPEC producer is exporting record volumes of oil to China.