Oil Prices Slide as OPEC Meeting Delayed and Tensions Mount

Oil prices experienced a decline at the start of the week as the members of the Organization of the Petroleum Exporting Countries (OPEC) prepared for an upcoming meeting. Initially scheduled to take place over the weekend, the meeting has been postponed to Thursday and will now be held virtually instead of in person. The rescheduling emerged due to Nigeria and Angola advocating for a higher output allowance. In June, these two countries had received lower allowances as they had previously failed to meet their production quotas.

The overall expectation is that OPEC will extend production cuts, if not during this meeting, then in the near future. In fact, to maintain high global prices, Saudi Arabia and Russia are already voluntarily reducing their output more than what the OPEC quotas require.

However, this delay in the OPEC meeting and the disagreement regarding output allowances highlight the challenges faced by the bloc in satisfying all its members. While higher oil prices benefit all oil producers, each country also seeks to sell as much oil as possible to maximize revenue.

As of now, the Brent crude, which serves as an international benchmark, is down 0.6% at $80.07 per barrel. There was a brief drop below $80 overnight. On the other hand, West Texas Intermediate, the standard used in the United States, has slipped 0.8% to $74.90 per barrel. Both contracts have witnessed a decline of around 7% this year.