OPEC will not cut the output production target at the next meeting on Dec. 4 because the goal to defend its market share has not been reached yet, Director of Center for Energy in French Institute of international Relations (IFRI) Marie-Claire Aoun believes.
Aoun said that Saudi Arabia who has the most important production capacity among OPEC members, decided since November 2014 to adopt a strategy aiming at excluding the high-cost production units, most importantly the light tight oils.
The expert said that this strategy is paying off only now, because the US oil production appeared to be much more resilient than initially expected, thanks to significant productivity gains.
“It is estimated that the decline in the US oil production will reach 1 million barrels per day in July 2016. Considering these elements, at least for a few months, Saudi Arabia will probably maintain this “do-nothing” (not cutting production quotas) strategy in order to preserve its market share,” Aoun said.
Meanwhile she noted that not all the OPEC members are satisfied with the strategy and low oil practice as a result.
Another OPEC conference will take place in Vienna today to discuss production quotas of the OPEC member-states.
