OPEC’s largest producer and de facto leader Saudi Arabia will likely tell fellow producers in the OPEC+ pact next week that the Kingdom would no longer tolerate and compensate for cheating on assigned production quotas, Bloomberg reported on Friday, citing people with knowledge of the current Saudi position.
While other members in the cartel, notably Iraq and Nigeria, have repeatedly exceeded their respective production caps by more than 100,000 bpd, Saudi Arabia has not only stuck with its share of the cuts, but has also overcomplied by more than 400,000 bpd—bringing the total reduction of the Kingdom at more than 700,000 bpd in recent months.
At his first full OPEC summit as Saudi Energy Minister, Prince Abdulaziz bin Salman is expected to take a harder line on non-compliant producers than his predecessor Khalid al-Falih, whose “whatever it takes” to balance the market meant that the Saudis were inclined, for some time, to compensate for rogue OPEC members.
Saudi Arabia is reportedly pressuring non-compliant cartel members to fall in line with their share of the cuts, instead of pushing aggressively next week for a deeper overall cut to rebalance the market. Deeper cuts would mean the Saudis would have to take the lion’s share of cuts, again.