Strong disagreements emerged inside the OPEC ahead of its November 27 meeting after Saudi Arabia said it would not unilaterally cut oil output, if the other oil cartel’s member states were unready for a similar move.
Riyadh has clearly let it know that the OPEC member states bear joint responsibility for the global oil market and they should not expect Saudi Arabia to be the only country in the oil cartel to cut its supplies, analyst and former assistant to the Saudi oil minister Mohamed al-Sabban said.
Unless agreement is reached on this fundamental issue, Saudi Arabia will continue defending its share of the world oil market, he said.
World oil prices are likely to continue sliding until Riyadh clearly states its position, Mizuho Securities futures division head Boba Yavgera said.
Experts also link a future oil price trend with the results of the negotiations between a group of six world powers and Iran on its controversial nuclear program. November 21 has been set as a deadline for reaching a compromise.
If the sides work out a compromise, oil prices will fall further as it will pave the way for lifting Western sanctions from the Iranian oil sector, the BBC said.
Meanwhile, The Wall Street Journal reported on Tuesday that diplomats involved in consultations with Iran spoke about the low probability of reaching agreement with Iran by November 24.
According to data of the International Energy Agency (IEA), OPEC member states’ daily oil supplies exceed their current limit of 30 million barrels by 500,000 barrels.