OPEC+ to consider oil production cuts on Monday

OPEC+ will meet Monday to decide on oil production quotas. Five OPEC+ sources say the quotas will remain unchanged in October. At the same time, other sources do not rule out a small cut in production to maintain prices, which have fallen due to fears of an economic downturn. 

The Organization of Petroleum Exporting Countries and its allies, including Russia, known as OPEC+, meets at a time when demand is at a disadvantage. Supply may be boosted by a return of Iranian oil, which will be possible if Tehran can reach an agreement with world powers on its nuclear program. 

The price of Brent crude fell from $120 to $93 a barrel in June. This was caused by fears of an economic recession in the West.

If sanctions are eased, Iran will increase its supply by 1 million barrels a day, which is 1% of global demand. True, the prospect of a nuclear deal on Friday was not so clear.

Saudi Arabia, OPEC's top producer, last month offered to halt a significant drop in oil prices by cutting oil production.

But oil supply remains tight, with most OPEC members producing below target. At the same time, Russia's oil exports are threatened by Western sanctions.

Last week, Russia said it would stop supplying oil to countries that support the idea of limiting Russian energy prices. In addition, gas supplies from Russia to Europe have decreased. In view of this, another jump in gas prices in Europe is possible.

Five OPEC+ sources said Sunday that the current oil production policy may be maintained at the Sept. 5 meeting.

However, two of the five sources said the group may discuss a small production cut of 100,000 barrels a day to return production quotas to August levels. According to one of the two sources, this could create a sense of slight reduction in the market.