Oil prices jumped to $50.04 per barrel on Thursday, June 2, as the Organization of the Petroleum Exporting Countries, OPEC, ended its much anticipated meeting without setting a cap for crude production.
Market participants had gathered in Vienna, venue of the meeting in Austria for signs of agreement on reviving the group’s collective output quota proposed by Saudi Arabia or the introduction of individual member country quotas suggested by Iran.
However, sources within OPEC said the cartel failed to agree on output policy or set a new ceiling.
The market is currently oversupplied by an estimated 1.5-2.0 million barrels per day.
Saudi Arabia promised yesterday not to flood the oil market with extra barrels even as members of the Organisation of Petroleum Exporting Countries (OPEC) failed to agree on output policy, with Iran insisting on the right to raise production steeply.
Tensions between the Sunni-led kingdom and the Shi’ite Islamic Republic have been the highlights of several previous OPEC meetings, including last December’s, when the group failed to agree on a formal output target for the first time in years.
But, tensions, however, were less acute yesterday in Vienna, Austria, where Saudi Arabia’s new Energy Minister, Khalid al-Falih, showed Riyadh wanted to be more conciliatory and his Iranian counterpart, Bijan Zanganeh, kept his criticism of Riyadh to an unusual minimum.
The decision was a softening of Saudi Arabia’s previous stance where it rigorously pumped to defend its share of a market.
Oil Price Surge as OPEC Fails to Set Output Benchmark https://t.co/Erym8ale83