As there is a continuous fall in prices of oil (from a high of around $150 per barrel in 2008 to around $40) and with the economic downturn analysts are expecting a further decline in the demand for oil, OPEC (Organization of Petroleum Exporting Countries) is having a tough time deciding on whether to cut the production quotas again or let the oil prices fall even further. A meeting is to be held on Sunday, 15 March 2009 in Vienna, the capital of Austria to discuss on this issue.
OPEC has already cut production thrice in the last 6months in order to control the oil prices and oversupply in the market.
Most of the OPEC nations (one of which is Libya) believe that there should be further cut in production as it will help in controlling the oil prices from falling further and oil prices play a very important in improving the current situation of global crises.
The cut in the production if it takes place is expected to be between 500000 – 1millon barrel a day.
However Saudi Arabia, world’s largest exporter suggests there should be no change in the output production. Other members including Ecuador, Qatar, Iraq, and Kuwait are also of the same view. According to the ministers of these countries unless there is no compliance to the previous cuts, any further cut in the production would show no improvement or change in the current scenario.
OPEC has also approached Russia to join the company. This would have been a great deal as Russia is a large exporter having 60 billion barrels of oil reserves and would have been the 2nd largest exporter of oil after Saudi Arabia if a part of the company. However it has stated that it would not be interested to be a member, but would be working with OPEC on controlling the oil prices.
The OPEC members include Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE, and Venezuela.
