Vienna, Austria – OPEC ministers are gathered in Vienna to discuss global oil output, with analysts expecting a significant decision on production amid political tension between some member states.
But Iran and other members have expressed opposition and had gone as far as threatening to veto the Saudi proposal.
Friday’s ministerial meeting is expected to be one of the toughest in recent memory.
At the core of the disagreement is a complex web of competing economic and political interests among the 14 OPEC members.
Geopolitics loom over the gathering with ministers of Saudi Arabia and Iran, the Middle East’s main regional rivals, at the table.
OPEC’s external influencers are also powerful. The US has been lobbying the Saudi leadership for months, urging an end to OPEC’s voluntary cut in oil production.
US President Donald Trump has tweeted several times that he believes OPEC is artificially keeping prices high.
Russia – the world’s largest oil producer followed by the kingdom – is also lobbying for a gradual end to the current cap on output.
With Iran braced to absorb the impact of fresh US sanctions connected to Trump’s rejection of the Iran nuclear deal, Tehran is hoping for a steady oil price.
On the eve of the OPEC meeting, the price of oil dropped on the expectation that it was nearing a decision to raise production.
The International Energy Agency (IEA) warned last week of a “supply gap”, with the potential for as many as 1.5 million barrels per day (bpd) being lost from Venezuelan and Iranian suppliers by the end of 2019.
Ensuring stable supply could be the driving rationale for OPEC to decide on Friday to open the taps.
“There will be a shortfall by the end of the year of around 1.6m to 1.8m barrels a day,” John Hall, chairman of the Alfa Energy Group, told Al Jazeera. “It will take time for anything to filter through. So whatever [OPEC ministers] decide to do in the next few days, it won’t be instant, but it’ll have an impact on the market.
“What they also want to insure against is that the stock overhang that we’ve seen in recent years, doesn’t come back again.”
Oversupply had contributed to the shrinking price of oil since 2014.
After trading at above $100 a barrel, oil slumped to $25 a barrel within 18 months – in January 2016.
Output restrictions, which OPEC unanimously adopted in January 2017, have run down excess stocks and helped the oil price recover to around $70 per barrel.
Iran, which had earlier been expected to oppose a rise in output, has since hinted it would support a rise.
A failure to reach a unanimous decision would herald a return to a more chaotic energy landscape.
While OPEC ministers are expected to support a decision to lift output on Friday, the questions they next face is when and how to draw the production restrictions to a close?
“If we depart on Friday … with no output hike on the cards, then there is an inherent danger that the discipline might be lost, that the Saudis might go it alone even for 250,000 barrels,” oil market analyst Gaurav Sharma told Al Jazeera.
“That’ll give the pretext to the Russians and the 10 non-OPEC guys who’ve been holding their discipline, to say, ‘You know what, let’s pump up our production as well’.”
Meanwhile, OPEC’s technical data suggests strong oil demand until 2019 amid predictions that global demand is soon to top 100 million bpd.