Baku. 20 November. REPORT.AZ/ Organization of Petroleum Exporting Countries (OPEC) may announce an increase in oil production quotas on 4 December.
Report informs, on November 10, the secretary general of the organization Abdullah al-Badri said that the cartel intends to fight for market share.Moreover, he called on all countries outside of OPEC to cut production.Al-Badri also said that OPEC will help Iran to increase oil production after sanctions will be lifted.
A key member of the cartel - Saudi Arabia has a special position on quotas. Stop pumping oil means losing customers where competitors can take advantage. Saudi Oil Minister al-Naimi said that his country will not reduce production even at 20 USD a barrel: "Russian, American and Brazilian companies will take away our share."
Therefore, Saudi Arabia can take the initiative to increase production.The country faced with a sharp fiscal deficit and plans to increase production volumes in order to cover it.In addition, Saudi Arabia is going to draw foreign loans to continue to invest in production.OPEC will allow Riyadh to increase quota to freely download the necessary volumes of hydrocarbons. Oil prices, respectively, will go down even faster.In this way the kingdom is going to remove the competitive US shale companies.OPEC has already achieved success in this direction..The number of drilling rigs operating in the United States declined from 1900 last year to 574 this year, 20 corporations went bankrupt, and the volume of shale raw materials decreased by 500 thousand barrels per day.
After receiving a share of competitors, Saudi Arabia will benefit not because of oil prices and higher sales. However, this method can bring down quotes.
In addition, it should be noted that in December, another party - Indonesia will join OPEC, which produces about 0.9 mln barrels per day, and quotas at a meeting on September 4 can be increased just by this amount.
On the other hand, analysts believe that even if the cartel decides to increase production, quotas would be violated. The current quota is 30 mln barrels per day.However, in October, the average daily oil production by OPEC countries have exceeded the quota by 5.5% and constituted 31.64 mln barrels.