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RIYADH — A drone strike on two major oil facilities in Saudi Arabia has severely disrupted production and drawn allegations that Iran is responsible for what the US has called an “unprecedented attack on the world’s energy supply”.

Here is what we know about the implications of the strike on the Abqaiq plant, the world’s largest oil processing facility, and nearby Khurais, which hosts a massive oil field.

The attack took place as a five-year war rages in Yemen, pitting the Iran-linked Huthi rebels against a Saudi-led military coalition in a conflict that has raised tensions across the region.

Saudi energy infrastructure has been hit by the Houthis many times before, but this strike is of a different order, forcing the state-owned oil giant Aramco to temporarily suspend about half its total output.

However, the full extent of the damage and what weapons were used is not clear. Reporters were not allowed near the plants, where Saudi authorities swiftly beefed up security.

“This is going to focus attention on the Yemen war,” said James Dorsey, a Middle East expert at the S. Rajaratnam School of International Studies in Singapore.

Rather than being “somewhere in the backyard in a remote part of the Gulf”, the war is “starting to involve key assets,” he said.

The Houthi rebels in Yemen claim they sent a swarm of drones far across the border to carry out the strikes, in what would be their most ambitious and devastating attack after dozens of smaller-scale operations.

US Secretary of State Mike Pompeo blamed Tehran for the attack, saying there was no evidence it was launched from Yemen. But he did not explain how Iran was to blame or where the weapons came from.

Iran on Sunday dismissed the accusation as “meaningless”.

The Wall Street Journal cited unnamed sources as saying that Saudi and American officials are investigating the possibility that the strikes involved cruise missiles launched from Iraq or Iran.

The attacks, which have cut six per cent of the world’s oil supply, could drive up prices when markets re-open on Monday, but the impact will depend on how quickly the Organisation of the Petroleum Exporting Countries (OPEC) kingpin can restore production.

Aramco also said it would dip into its stocks to offset the disruption.

The incident could undermine investor confidence in Aramco’s looming stock market debut, a mammoth listing that the government hopes will raise up to $100 billion based on a $2 trillion valuation of the company.

If it does turn out that Tehran carried out the attack, it would pose a major national security headache for Donald Trump and potentially upend a nascent US softening on Iran. 

In June, the US president called off a strike on Iran and he recently said he believes the leadership wants to talk, fanning speculation that he may arrange a summit with his Iranian counterpart at the upcoming UN assembly.

The strikes will also escalate the bitter rivalry between Saudi Arabia and Iran, locked in a decades-old struggle for regional dominance.

Saudi de facto ruler Crown Prince Mohammed Bin Salman has said the kingdom is “willing and able” to respond to this “terrorist aggression”.

But Dorsey says a direct retaliation is unlikely, as “the Saudis do not want an open conflict with Iran”. 

“The Saudis would like others to fight that war, and the others are reluctant,” he said.

If the Houthis are found to be responsible, it would likely set back talks that Washington confirmed earlier this month had been launched in a bid to end the country’s devastating five-year war.

Saudi Arabia has splurged billions on military hardware including advanced fighter jets. But its arsenal has proved ineffective against the Houthis, a ragtag but highly motivated tribal militia that specialises in hit-and-run guerrilla tactics. 

Recent developments have also highlighted the potent threat posed by the Houthis’ steadily advancing weaponry, from ballistic missiles to unmanned drones.

While the kingdom’s oil wells, scattered over a vast geographical area, may be a difficult target, its various oil processing facilities are much more exposed.

The Abqaiq facility is the “most vulnerable” among them, according to the Washington-based Centre for Strategic and International Studies.

Aramco’s vast system of pipelines, pumping stations and ports along the Gulf and Red Sea are also at risk. A drone attack on two oil pumping stations in May forced a days-long shutdown.

BAGHDAD — Iraq on Saturday signed a $1.3 billion deal with German industrial conglomerate Siemens and Egypt's Orascom Construction to rebuild a major power plant complex in the ravaged city of Baiji, north of Baghdad.

The new deal is part of a broader energy road map that Iraq signed with Siemens earlier this year in a bid to pump 11 gigawatts (GW) into Iraq's crippled power sector.

The country currently generates around 15GW, far short of estimated demand of about 24GW. 

The Baiji 1 and 2 plants, as well as a massive oil refinery nearby, were destroyed in the three-year fight against the terror group Daesh after it swept across a third of Iraq in 2014.

Many of Baiji's neighbourhoods remain gutted, surrounding fields are littered with unexploded ordnance and the area is controlled by a complex web of paramilitary groups.

On Saturday, Iraqi Electricity Minister Luay Al Khateeb signed the deal in Baghdad with Siemens CEO Joe Kaeser and Orascom chief Osama Bishai. 

"This agreement worth $1.3 billion will add up to 1.7GW to the grid," Khateeb told reporters. 

Siemens said the plant renovation would take about 28 months, starting once the Iraqi Cabinet approves the contracts and a financing agreement is reached. 

Iraq's grid has been ravaged by decades of conflict and poor maintenance, causing chronic power cuts across the country. 

Iraq tops up its grid with electricity imported from neighbouring Iran, as well as using Iranian natural gas to feed its power plants. 

The US has granted Iraq a series of waivers from sanctions against Iran, allowing it to keep up its imports — providing it works to wean itself off them. 

US officials have urged Iraq to partner with American companies, including General Electric, to gain energy independence. 

Industry sources have criticised the move as putting unfair pressure on Baghdad to favour US firms. 

Kaeser on Saturday hinted that such pressure had eased and a "level playing field" had been achieved. 

"Time will tell, but otherwise somebody else would have been here signing today," he said. 

ABU DHABI — OPEC kingpin Saudi Arabia on Thursday led calls for oil producers to comply with output cuts aimed at stabilising a slumping oil market, as a gloomy new forecast blamed US-China trade tensions for depressed demand.

Riyadh has been shouldering the burden of existing production cuts, but other nations — notably Nigeria and Iraq — are accused of exceeding their quotas.

"Every country should live up to its commitments," new Saudi Energy Minister Prince Abdulaziz Bin Salman said as a committee of producers charged with monitoring the cuts and assessing the oil market opened talks.

Prince Abdulaziz told the Joint Ministerial Monitoring Committee (JMMC) meeting in Abu Dhabi that it was imperative to restore stability in the oil market where prices have slumped to below $60 a barrel.

"He highlighted OPEC's operating paradigm of inclusiveness. He stressed that every country counts regardless of its size and that every country should live up to its commitments," the Saudi energy ministry said in a tweet.

In a statement after the talks, the committee also emphasised compliance, saying that "equality, fairness and transparency" were essential.

Dubbed OPEC+, the 24-member alliance of cartel and non-cartel producers decided last year to cut output by 1.2 million barrels per day (bpd) from January 2019, to boost prices after they fell by more than 40 per cent.

The cuts were extended by nine months until the end of March but that move failed to invigorate the market.

United Arab Emirates Energy Minister Suheil Al Mazrouei said on Sunday that the group will do whatever necessary to stabilise the market, and that further production cuts could be considered.

However, he admitted the issue was not entirely in the hands of the world's top producers, with the market no longer governed by supply but being influenced more by US-China trade tensions and geopolitical factors. 

 Subdued outlook 

There was no good news from the latest International Energy Agency (IEA) monthly report, which said growth in global demand for oil is expected to remain subdued.

"International trade relations have further deteriorated in the past few weeks but US and Chinese officials announced that they would resume trade negotiations in early October," the Paris-based IEA said on Thursday.

"Trade disputes and rising uncertainty about the impact of the UK's possible exit from the European Union are reducing global growth through lower business and consumer confidence, supply chain reassessments, declining investment and direct reduction of trade."

Against the uncertain backdrop, the IEA left its oil demand growth forecasts for 2019 and 2020, lowered in its previous monthly report, unchanged at 1.1 million barrels per day and 1.3 million bpd.

Russian Energy Minister Alexander Novak said on Thursday that the OPEC+ alliance has managed in the past to "adapt and react to the changing market conditions".

Novak, whose country is the largest producer in the group, said producers are determined to achieve stability in the oil market.

The JMMC does not take decisions but makes recommendations for action which will be considered by the full OPEC+ ministerial meeting in December.

The Saudi energy ministry said on Twitter that Prince Abdulaziz's comment "underscores the key objective of the kingdom's oil policy, which is to achieve market stability & stresses the importance of maintaining a high degree of cohesiveness among OPEC and non-OPEC producers, led by Russia".

The prince was recently promoted to the pivotal role, replacing veteran official Khalid Al Falih as the top crude exporter accelerates preparations for the much-anticipated IPO of its energy giant Aramco.

A son of King Salman, and half-brother to de facto ruler Crown Prince Mohammed Bin Salman, he is the first member of the royal family ever put in charge of the kingdom's all-important energy ministry.

In his debut at the Abu Dhabi industry talks this week, Prince Abdulaziz — a veteran of the industry with decades of experience — has emphasised that existing Saudi energy policy will not change.

ABU DHABI  — In the vast air-conditioned halls of an Abu Dhabi conference centre, the world's much-vaunted transition to clean energy is the buzzword in sessions of a top industry gathering.

But many executives and officials from oil-dependent Gulf states insist that while the change to renewables is essential, fossil fuels remain the future at least for the next few decades, despite the urgent need to fight climate change.

The debate has taken centre stage at this week's World Energy Congress, with many officials calling for accelerating the process of moving to clean power sources and minimising carbon emissions.

Speakers addressed issues like the role of nuclear, hydrogen gas and other non-conventional sources of energy as a replacement for fossil fuels which currently account for over three quarters of the world's energy consumption.

However, delegates from oil-producing countries and particularly those in the Gulf argued that although the transition to clean energy sources must be supported, they will not be able to meet rising demand any time soon.

"For decades to come the world will still rely on oil and gas as the majority source of energy," said the head of Abu Dhabi Oil Co. Jaber Sultan.

"About $11 trillion of investment in oil and gas is needed to keep up with current projected demand," over the next two decades, he told the congress which was attended by representatives of 150 nations and over 400 CEOs.

Energy from increasingly competitive renewable sources has quadrupled globally in just a decade, but insatiable demand for energy particularly from developing economies saw power sector emissions rise 10 per cent, a UN report said last week. 

"All energy transitions — including this one — take decades, with many challenges along the road," the CEO of Saudi energy giant Aramco, Amin Nasser, said at the conference.

Nasser said his country supports the growing contribution of alternatives, but criticised policies adopted by many governments that do not consider "the long-term nature of our business and the need for orderly transition".

Addicted to oil 

Oil is still the lifeline for the Gulf states, contributing at least 70 per cent of national revenues across the region which has been cushioned by decades of immense profits from the flow of "black gold".

Gulf nations have invested tens of billions of dollars in clean energy projects, mainly in solar and nuclear.

Dubai has launched the world's largest solar energy project, with a price tag of $13.6 billion and the capacity to satisfy a quarter of the energy-hungry emirate's current needs when it comes on line in 2030.

But critics say the addiction to oil is a tough one to kick, particularly when supplies remain abundant and the massive investment in infrastructure necessary to switch to renewables is daunting.

"A global shift from dirty fossil fuel to renewable energy is economically, technically and technologically feasible... All that is missing is political will!" said Julien Jreissati from Greenpeace in the Middle East.

He said while the United Arab Emirates has put plans into action, "Saudi Arabia which has always made big announcements regarding their renewable energy ambitions is lagging behind as their projects and targets remain ink on paper.”

"There is no doubt that the world will leave oil behind. The only question remaining is when will this happen?"

Despite important technological advances made in the past decade, renewable energy sources still make up just around 18 per cent and nuclear adds another 6 per cent of the world's energy mix. 

In the past decade, the adoption of wind and solar energy picked up rapidly as the production cost plummeted to levels close to that of oil and gas.

But the Abu Dhabi conference saw calls for accelerated innovation and "disruptive" technology to speed the transition as the world prepares for global energy demand to peak between 2020 and 2025, according to the World Energy Council.

Estonian President Kersti Kaljulaid said that sustainable and environmentally friendly energy practices must be aligned with national and global economic policies in order to have the required impact.

"It makes more economic sense to apply all green technologies globally, and if this happens we might go to being CO2-free energy users 5 or 10 or 20 years quicker," she told the conference.

"I prefer that market forces, pushed by smart policymaking and legal space-setting, act quickly and save us all from the alternative."

ABU DHABI — Saudi Arabia’ energy company Aramco is ready for a two-stage stock market debut including an international listing "very soon" but the timing is up to the government, its CEO said on Tuesday.

Aramco has said it plans to float around 5 per cent of the state-owned company in 2020 or 2021 in what could potentially be the world's biggest stock sale.

The mammoth Initial Public Offering (IPO) forms the cornerstone of a reform programme envisaged by the kingdom's de facto ruler Crown Prince Mohammed Bin Salman to wean the Saudi economy off its reliance on oil.

It aims to raise up to $100 billion based on a $2 trillion valuation of the company, but investors have debated whether Aramco is worth that much and there have been repeated delays in the launch originally envisaged for 2018.

"We have always said is that Aramco is ready for listing whenever the shareholders make a decision to list," Aramco CEO Amin Nasser told reporters on the sidelines of the World Energy Congress. 

"And as you hear from His Royal Highness Prince Abdulaziz yesterday, it is going to be very soon. So we are ready — that is the bottom line," he said, referring to the newly appointed energy minister.

With the low oil price believed to be a factor weighing on their decision-making, he added however that the actual date would be a "government decision".

The government has not given any explanation for the delays, but apart from holding out for the big-ticket valuation they are also said to be concerned the IPO could bring intense legal scrutiny of the secretive company's finances and corporate inner workings.

Tokyo option 

The Wall Street Journal reported last week that Aramco was considering a two-stage process with a domestic debut and a subsequent international listing — possibly in Tokyo. 

"One of the primary listings is going to be local but we are also ready for listing outside," Nasser confirmed.

A Tokyo listing would be a setback for London, New York and Hong Kong, which have all vied for a slice of the business. 

Political uncertainty in Britain over its plan to exit the European Union and mass protests in Hong Kong have diminished their prospects, the Journal cited Saudi officials as saying.

Prince Abdulaziz Bin Salman was promoted on Sunday to the pivotal role of energy minister, replacing veteran official Khalid Al Falih, as the top crude exporter accelerates preparations for the much-anticipated IPO.

The appointment of Prince Abdulaziz, one of the sons of Saudi Arabia's King Salman, marks the first time a royal family member has been put in charge of the all-important ministry.

In his first comments since taking up the role, the minister on Monday endorsed oil supply cuts, saying in Abu Dhabi that they would benefit all producing nations amid an oversupplied market and sagging prices. 

Crude prices are currently moving around levels of $60 a barrel, compared with more than $75 a year ago, but were given a boost on Monday by the comments.

 Prices in decline 

The OPEC petroleum exporters' cartel and key independent producers are deliberating how to halt a slide in prices that has persisted despite previous cuts and US sanctions that have squeezed supply from Iran and Venezuela.

Abu Dhabi is also hosting this week a meeting of the Joint Ministerial Monitoring Committee of the OPEC+ alliance for a supply cut deal reached last year.

The ministers will consider fresh reductions, even though analysts are doubtful such a move would succeed in bolstering crude prices which have been badly dented by the US-China trade war.

The Aramco listing is key to Saudi's economic future. Its GDP grew by 2.4 per cent last year but the International Monetary Fund (IMF) said growth would fall to 1.9 per cent in 2019 due to substantial oil output cuts.

The IMF said that fiscal reforms, including a consumption tax and higher energy prices, have started to yield results but that more is needed to plug a chronic budget deficit.

The prospect of falling short of the $2 trillion valuation desired by Saudi rulers is widely considered the reason the IPO — previously scheduled for 2018 — has been delayed.

Earlier this month, Aramco said its first half net income for 2019 slipped nearly 12 per cent to $46.9 billion on lower crude prices.

It was the first time the company has published half-year financial results and comes after Aramco opened its secretive accounts for the first time in April, revealing itself to be the world's most profitable company.

FRANKFURT AM MAIN — The European Central Bank (ECB) is widely expected on Thursday to lower negative interest rates even further, and possibly bring back its multi-billion-euro quantitative easing programme.

Here are the monetary policy tools the Frankfurt institution has hinted at deploying in the coming months to battle the uncertainty — over trade tensions, Brexit, geopolitical clashes and emerging market woes — weighing on progress towards its price stability goal.

Interest rates 

The ECB has sunk interest rates to historic lows since the twin shocks of the global financial and eurozone crises, as it pursues its mandated target of inflation of just below 2 per cent.

While deciding in July to hold the rate it charges on banks' deposits at the present -0.4 per cent, officials said it could dive to "lower levels".

Such a move should encourage lenders to issue more credit and invest in the real economy rather than hoarding cash.

Meanwhile, the ECB is less likely to shift its main refinancing rate — the interest it charges on one-week loans to banks — from its present zero per cent level.

'Tiering' 

With an eye on complaints from banks that the negative rates were hurting their business model, ECB chief Mario Draghi promised six weeks ago that "if we are to lower interest rates, that will come with mitigating measures".

Among such action could be a "tiering" system to exempt some deposits from the harshest negative rate.

Sweden, Switzerland, Denmark and Japan have already adopted such a measure, slashing lenders' annual bill on excess liquidity, which for eurozone banks currently amounts to around 7.5 billion euros ($8.4 billion) — mostly paid by French and German lenders.

Cheap loans to banks 

In March, Draghi said the bank would offer a third series of cheap two-year loans between September 2019 and March 2021.

The institution gave banks the chance to borrow massive amounts at extremely favourable interest rates in schemes known as TLTRO I and II between 2014 and 2016.

The measure was another attempt to encourage lending to the sluggish real economy.

Banks, especially the more fragile members of the sector in Italy, leapt at the chance for low-cost liquidity.

ECB policymakers decided in June that, depending on how much the banks lend to the real economy, they could — as in previous rounds — even enjoy a negative interest rate as low as -0.3 per cent on their borrowings.

That would mean the central bank effectively paying them to borrow money.

Mass bond-buying 

When lower interest rates alone failed to restore growth and inflation, the ECB turned to a policy of mass purchases of government and corporate bonds, known as "quantitative easing" or QE.

Between March 2015 and December 2018, policymakers bought up 2.6 trillion euros of debt, mostly at a pace of tens of billions per month.

The aim: To flush newly-created money through the financial system and into the real economy to stimulate growth.

Central bankers credit the scheme with helping ward off deflation and create millions of jobs.

In July, the ECB signalled it could once again employ that tool, saying it has tasked officials to examine "options for the size and composition of potential new net asset purchases".

A possible relaunch of QE "remains the natural policy response in the absence of a sustained rebound in inflation expectations", Pictet Wealth Management Strategist Frederik Ducrozet said.

But a new round of bond-buying could require the ECB to relax a 33 per cent limit on the share of any one country's debt it can buy.

That, in turn, could bring new legal and political challenges down on its head, risking a repeat appearance before Germany's constitutional court over allegations of "monetary financing" — or the central bank directly footing the bill for state spending — which is banned under European treaties.

ABU DHABI — Saudi Arabia’s new energy minister, Prince Abdulaziz Bin Salman, said on Monday that oil production cuts would benefit all exporting nations, in an indication he will support further reductions to address an oversupplied market and sagging prices.

In his first comments since being appointed by his father King Salman on Sunday, the minister signalled no major change in approach in Saudi Arabia, the de facto leader of the Organisation of the Petroleum Exporting Countries (OPEC) which pumps about a third of the cartel’s oil.

“The pillars of our oil policy are pre-determined and will not change,” he told Saudi broadcaster Al Arabiya.

The prince was in Abu Dhabi to attend the World Energy Congress, followed by a meeting on Thursday of the Joint Ministerial Monitoring Committee (JMMC) of the OPEC+ alliance for a supply cut deal reached last year.

The ministers will consider fresh reductions although analysts are doubtful that such a move would succeed in bolstering crude prices which have been badly dented by the US-China trade war.

Crude prices are currently moving around levels of $60 a barrel, in contrast with more than $75 this time last year but up from around $50 at the end of December 2018.

Prince Abdulaziz said that the trade war, which has triggered fears of a global recession, has cast a “fog” over the oil market.

However, he appeared to swing his support behind further curbs to rebalance the crude market.

“Cutting output will benefit all members of OPEC,” he told Al Arabiya on the sidelines of the conference.

The appointment of Prince Abdulaziz, half-brother to de facto ruler Crown Prince Mohammed Bin Salman, marks the first time a royal family member has been put in charge of the all-important energy ministry.

He replaces veteran official Khalid Al Falih as the world’s top crude exporter accelerates preparations for a much-anticipated stock listing of state-owned oil giant Aramco, expected to be the world’s biggest.

“Prince Abdulaziz is very experienced and has served in the energy industry for decades,” Giovanni Staunovo, an analyst at UBS Group AG in Zurich, told Bloomberg News.

“His comments today suggest we shouldn’t expect any major policy changes from the kingdom, which still wants to see oil inventories falling.”

Stubborn slide 

The OPEC petroleum exporters’ cartel and key independent producers want to halt a slide in prices that has persisted despite previous output cuts and US sanctions that have squeezed supply from Iran and Venezuela.

Analysts say the JMMC monitoring body has limited options when it meets in Abu Dhabi.

UAE Energy Minister Suheil Al Mazrouei said on Sunday the group would do “whatever necessary” to rebalance the crude market, but admitted that the issue was not entirely in the hands of the world’s top producers.

The market is no longer governed by supply and demand but is being influenced more by US-China trade tensions and geopolitical factors, he said. 

Analysts say that while cuts could help prices, they could also mean producers lose further market share.

Prince Abdulaziz also alluded to the sense that Saudi Arabia is shouldering the burden of production cuts, while other nations — notably Nigeria and Iraq — are flouting the limitations.

Speaking to reporters in Abu Dhabi, he said the pledges made so far were good, but that one or two countries “need to be more committed” in order to bring benefits to the entire industry.

The 25-nation OPEC+ group, dominated by the cartel’s kingpin Saudi Arabia and non-OPEC production giant Russia, agreed to reduce output in December 2018.

That came as a faltering global economy and a boom in US shale oil threatened to create a global glut in supply.

Previous supply cuts have mostly succeeded in bolstering prices. 

 But this time, the market has continued to slide — even after OPEC+ agreed in June to extend by nine months an earlier deal slashing output by 1.2 million barrels per day.

The new factor is the trade dispute between the US and China, whose tit-for-tat tariffs have created fears of a global recession that will undermine demand for oil.

DUBAI — Top oil producers will consider fresh output cuts at a meeting this week, but analysts are doubtful they will succeed in bolstering crude prices dented by the US-China trade war.

The OPEC petroleum exporters’ cartel and key non-OPEC members want to halt a slide in prices that has continued despite previous production cuts and US sanctions that have squeezed supply from Iran and Venezuela.

Analysts say the OPEC+ group’s Joint Ministerial Monitoring Committee, which monitors a supply cut deal reached last year, has limited options when it meets in Abu Dhabi on Thursday.

UAE Energy Minister Suheil Al Mazrouei said on Sunday the group would do “whatever necessary” to rebalance the crude market, but admitted that the issue was not entirely in the hands of the world’s top producers.

Speaking at a press conference in Abu Dhabi ahead of the World Energy Congress, to start on Monday, he said the oil market is no longer governed by supply and demand but is being influenced more by US-China trade tensions and geopolitical factors. 

The minister said that although further cuts will be considered at Thursday’s meeting, they may not be the best way to boost declining prices.

“Anything that the group sees that will balance the market, we are committed to discuss it and hopefully go and do whatever necessary,” he said.

“But I wouldn’t suggest to jump to cuts every time that we have an issue on trade tensions.”

While cuts could help prices, they could also mean producers lose further market share, analysts say.

“OPEC has traditionally resorted to production cuts in order to shore up the prices,” said M. R. Raghu, head of research at Kuwait Financial Centre (Markaz). 

“However, this has come at the cost of reduction in OPEC’s global crude market share from a peak of 35 per cent in 2012 to 30 per cent as of July 2019,” he told AFP.

The 24-nation OPEC+ group, dominated by the cartel’s kingpin Saudi Arabia and non-OPEC production giant Russia, agreed to reduce output in December 2018.

That came as a faltering global economy and a boom in US shale oil threatened to create a global glut in supply.

Previous supply cuts have mostly succeeded in bolstering prices. 

But this time, the market has continued to slide — even after OPEC+ agreed in June to extend by nine months an earlier deal slashing output by 1.2 million barrels per day (bpd).

Trade war 

The new factor is the trade dispute between the world’s two biggest economies, whose tit-for-tat tariffs have created fears of a global recession that will undermine demand for oil. 

Saudi economist Fadhl Al Bouenain said the oil market has become “highly sensitive to the US-China trade war”.

“What is happening to oil prices is outside the control of OPEC and certainly stronger than its capability,” Bouenain told AFP.

“Accordingly, I think OPEC+ will not resort to new production cuts” because that would further blunt the group’s already shrunken market share, he said.

European benchmark Brent was selling at $61.54 per barrel on Friday, in contrast with more than $75 this time last year but up from around $50 at the end of December 2018. 

The deliberations also coincide with stymied production from Iran and Venezuela and slower growth in US output, meaning that supplies are not excessively high.

“US shale output growth does not have the same momentum as in previous cycles, and OPEC production is at a 15-year low, having fallen by 2.7 million barrels per day over the past nine months,” Standard Chartered said in a commentary last month.

“We think that the oil policy options for key producers are limited, for the moment,” the investment bank said. 

No decisions will be taken at Thursday’s meeting, but it should produce recommendations ahead of an OPEC+ ministerial meeting in Vienna in December.

Rapidan Energy Group said the alliance might need to cut output by an additional 1 million bpd to stabilise the market.

But the problem will be deciding which member countries will shoulder the burden of any new cuts.

Saudi Arabia, which is the de facto leader of OPEC and pumps about a third of the cartel’s oil, took on more than its fair share last time around.

It has also undergone a major shake-up in its oil sector, announcing the replacement of energy minister Khalid Al Falih with Prince Abdulaziz Bin Salman in the early hours of Sunday morning ahead of a much-anticipated stock listing of state oil giant Aramco.

Bouenain said he believes that Riyadh is likely to resist taking on further cuts, given the impact on the kingdom’s revenues.

Raghu said that “without a favourable resolution to the dispute, OPEC’s production cuts will not result in a sizeable uptick of oil prices”.