In a week Oil Ministers from OPEC will meet in Vienna. The markets expect easing of a global glut. To get the agreement OPEC invited powerful oil exporters. Representatives from Russia, Azerbaijan and Mexico will come to Vienna. The part of enfant terrible is performed by Russia. Russians often told they ready to cut their oil output; however, they do not keep their promises. Playing muscles, the Kremlin would like to dramatize the market to show who will appear the greatest and the most unpredictable hand. At the moment Russia is pumping 11.2 million barrels per day. The country added half of a million barrels daily for sale since the last talk between Vladimir Putin and Saudi Deputy Crown Prince Mohammed bin Salman in September.
Russian Energy Minister Alexander Novak does not promise to attend the OPEC meeting; nevertheless, Russians will come to enjoy the late autumn in Vienna. Moscow is taking revenge after Saudis betrayed the agreement in April, when Putin has been ready to cut oil production. Unfortunately for Moscow, Riyadh was interested to put Tehran under pressure, while treating Russians as a second hand power at the today market.
In April Iranians rejected the offer to freeze or slow down the output, while dreaming to reach the level-before-sanctions and claiming for flexibility. The level of the output is almost reached: the Islamic Republic produces almost 3.7 million barrels daily. However, the production peaked at 6 million daily in 1974 before the Islamic Revolution. What if Tehran targets for this volume? The Oil Minister Zanganeh told, that the agreement is very close to be signed, but it is still potential, which need to transform into reality.
Saudi Arabia and United Arabic Emirates benefit from the situation. Even Saudis saw a slight decline in October in comparison with July, from 10.65 to 10.50 barrels daily, the production achieves historical high. The Emirates climb to their peak at 3 million per day.
Thanks to the rumors about new attempt to cut off oil production, the prices bouncing around above $48 per barrel. Let’s wait for Monday.