The Vienna Deal: A Crude Conundrum?

Journal article | Zeitschriftenartikel

After the 2016 Algiers Accord, all eyes are on Vienna where the 14-member OPEC will meet on November 30, 2016, to finalize and formalize the agenda to cut oil production, the first one since the financial crisis of 2008. At the Algiers meeting in September, the OPEC agreed to reduce output from 33.24 million barrels per day (mbpd) to a level between 32.5 million and 33 million barrels per day (mbpd) [1]. Accordingly, quotas for each of the member countries are expected to be decided in the Vienna at the 171st meeting of OPEC. The oil production cuts attempt to tackle the economic crisis being faced by the OPEC countries owing to a persistent fall in oil prices since mid-June 2016. Saudi Arabia, for its part, hopes to leverage its efforts to jump-start economic reform process under its ‘Vision 2030’ plan. The news of production cuts from some of the biggest oil producers brought cheers to the markets, propelling the prices upwards by more than 6 percent [2]. Subsequently, on October 27, 2016, oil prices recorded a 15-month high with Brent crude and U.S. West Texas Intermediate (WTI) at $50.47 and $49.72 respectively.[3] But the very next day, given the uncertainties around OPEC’s ability to sustain production cuts, both Brent and WTI registered a fall to $50.39 and 49.67 a barrel respectively. Given OPEC’s past record of quota violations, uncertainty regarding the group’s willingness to carry through with the cuts is expected. This skepticism prevalent in the oil market could be reflected during the Vienna meet which risks falling just short of a deal, thus aggravating the perception of an OPEC with increasingly diminishing relevance.

Object Details

• ISSN: 2381-3652
• Extent: Seite(n): 13
• Language: Englisch
• Notes: Status: Veröffentlichungsversion; begutachtet (peer reviewed)

References and Relationships

• Bibliographic citation: IndraStra Global, 2(11)

Classification and Topics

• Subject: Wirtschaft ; Internationale Beziehungen ; Wirtschaftssektoren ; internationale Beziehungen, Entwicklungspolitik ; OPEC ; Energiepolitik ; Preis ; Erdöl

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Vaid, Manish
• Event: Veröffentlichung
• (where): Vereinigte Staaten von Amerika
• (when): 2016

Further information

• URN: urn:nbn:de:0168-ssoar-49962-9
• Rights: GESIS - Leibniz-Institut für Sozialwissenschaften. Bibliothek Köln
• Last update: 21.06.2024, 4:26 PM CEST