OPEC oil ministers gather to discuss production increase
The oil ministers of the OPEC cartel began gathering in Vienna on Tuesday to discuss whether to increase production of crude and help limit a rise in global energy prices.
The officials were arriving ahead of the official meeting Friday, when they will also confer with Russia, a non-OPEC country that since late 2016 has cooperated with the cartel to limit production.
Analysts expect the group to discuss an increase in production of about one million barrels a day, ending the output cut agreed on in 2016.
The cut has since then pushed up the price of crude oil by about 50 per cent. The US benchmark in May hit its highest level in three and half years, at US$72.35 a barrel.
Upon arriving, the energy minister of the United Arab Emirates, Suhail Al Mazrouei, said: "It's going to be hopefully a good meeting. We look forward to having this gathering with OPEC and non-OPEC."
The 14 countries in OPEC - the Organization of the Petroleum Exporting Countries - make more money with higher prices, but are mindful of the fact that more expensive crude can encourage a shift to renewable resources and hurt demand.
"Consumers as well as businesses will be hoping that this week's OPEC meeting succeeds in keeping a lid on prices, and in so doing calling a halt to a period which has seen a steady rise in fuel costs," said Michael Hewson, chief market analyst at CMC Markets UK.
The rise in the cost of oil has been a key factor in driving up consumer price inflation in major economies like the United States and Europe in recent months.
Within OPEC, an increase in output will not affect all countries equally. While Saudi Arabia, the cartel's biggest producer, is seen to be open to a rise in production, other countries cannot afford to do so. Those include Iran and Venezuela, whose industries are stymied either by international sanctions or domestic turmoil. Iran is a fierce regional rival to Saudi Arabia, meaning the OPEC deal could also influence the geopolitics in the Middle East.