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Guillaume Albasini

OPEC June 22 meeting : how to get a compromise ?

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The Vienna meeting between OPEC and non-OPEC oil producers on June 22 is expected to oppose the countries with no spare capacity like Iran and Iraq on one side who are pushing for no production increase and the others like Russia and Saudi Arabia and Kuwait who have more spare capacity and are wishing to increase production on the other side .

An unanimous decision to ramp up the oil production will be difficult to reach. The countries with no spare capacity will not benefit from a production hike. They will end up producing the same amount of oil but at a lower price.

But if the decision is to stick to the current agreement, Russia could be tempted to leave the agreement and start pumping more oil.


A compromise seems hard to find but there could be a way to maintain the current agreement and at the same time allow the countries with spare capacity to increase the production.


The solution could be to allow the countries wanting to pump more oil to rent unused quotas from the countries producing below their quota.

Venezuela currently producing  500'000 b/d below the quota could for instance lend for 3 month the right to extract 300'000 b/d  to Russia and 200'000 b/d to Saudi Arabia and get some desperately needed cash in exchange.

With such a system, the original 1,176'000 b/d reduction target could be sustained with a compliance level of around 100% as it was the case until october  2017 (instead of the current 166% level of overcompliance). A total capacity of around 750'000 b/d could be available for rent generating additional revenues to countries like Venezuela, Mexico, Angola or Libya facing difficulties to pump at full capacity.

We could then discuss if it would be better to process via an auction system or direct transactions.


Do you think this kind of compromise is a possible outcome of the June 22 meeting ?



On the level of compliance evolution over time and data for all OPEC and non OPEC see







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