Save for later Print Download Share LinkedIn Twitter With the Dec. 4 Opec-plus meeting fast approaching, all eyes are on the group’s next move — and whether this will involve some form of easing of the headline 2 million barrel per day cut announced in early October. After last month’s public spat with Saudi Arabia, US officials certainly expect this. For now, members remain tight-lipped on what options may be examined, with delegates telling Energy Intelligence that it is too early even for informal talks. However, some positioning has started over the thorny issue of members' production baselines. Baseline revisions would be one way to free up more Opec-plus output in the market by aligning members' quotas more closely with their true production capacity. For months, many Opec-plus members, including Russia, Nigeria and Angola, have been falling short of their targets. The result is that the group as a whole has been pumping about 3.5 million b/d less than targeted in recent months. But it is still unclear how the sensitive issue of quotas and baselines could be addressed, as many members are keen to preserve their share of the oil market — even if only on paper. The other main option to ease the cut, a simple adjustment of the 2 million b/d target, is not currently under discussion, Energy Intelligence understands. Opec-plus could also choose to maintain its cuts given a negative market outlook, although this could provoke a renewed US reaction.Some Opec-plus countries are already seeking higher baselines. This week, Iraq’s Prime Minister Mohammed Shia al-Sudani said his country’s baseline requires a revision — even though Iraq’s aging export infrastructure has limited its ability to hit its current target. The baselines of the top five Opec-plus producers were increased in May after the United Arab Emirates — keen to use expanding capacity — raised the issue. Iraq’s quota at the time was raised by 150,000 b/d to 4.8 million b/d, but due to export constraints, the country has never produced at that level. Energy Intelligence estimates that Iraq pumped just shy of 4.5 million b/d in October, about 150,000 b/d below that month’s quota. Nigeria is among those that might resist any attempt to revise its baseline lower even though it has been missing its target. Nigerian National Petroleum Corp. CEO Mele Kyari recently told Energy Intelligence that his country was planning to boost crude output to 1.8 million b/d by the end of this year from around 1.45 million b/d, although industry experts are skeptical. The only two Opec-plus states that can bring additional production on swiftly are Saudi Arabia and the UAE.After the October agreement to cut, Opec-plus delegates hinted at a possible future adjustment. But Saudi Energy Minister Prince Abdulaziz bin Salman recently indicated that Opec-plus will remain cautious about oil supply, and previously emphasized that the national interests of Opec-plus members would be prioritized in charting the group's course. For now, the spat between Riyadh and Washington has cooled. A key question is whether the Biden administration will release more US strategic stockpiles to try to cool prices — a move that Opec-plus would account for in its supply policy. US officials told Energy Intelligence they hope Opec-plus will ease the cuts at the next meeting, but the extent of direct or indirect assurances on this is unclear. Energy Intelligence understands that the last decision to cut was unanimous, with no Opec-plus states objecting. However, following the Oct. 5 meeting, diplomats from some Arab states, including the UAE and Iraq, told US officials they had raised objections to the cuts, according to sources familiar with the matter.Demand has emerged as major concern as recession looms. But oil prices remain elevated at over $90 per barrel and supply risks abound as an EU embargo on Russian crude imports approaches on Dec. 5. Energy Intelligence balances point to a surplus of around 600,000 b/d in first half of 2023. This week, Opec again lowered its demand growth estimates for 2022 and 2023, saying there are signs that the global economy has entered a period of "significant uncertainty and mounting challenges." In its latest monthly report, Opec trimmed its demand forecasts for both years by 100,000 b/d each. That followed downward revisions last month of 500,000 b/d for 2022 and 400,000 b/d for 2023. Still, some delegates suspect that a partial easing of the cuts might be considered as a gesture to consumer states and to show that Opec-plus is ready to be flexible.