On Monday, French President Emmanuel Macron urged oil producers to increase production by “exceptional” volumes, the AFP news agency reported.
But when oil exporters meet on Thursday to decide whether to increase production, they will have to take into account a looming global recession that threatens to reduce demand for their oil and reduce their ability to control its price.
A recession is an “increasingly tangible risk” to the economy, analysts at Citigroup wrote in a note Wednesday, assessing the trajectory of global growth over the next 18 months.
Experts say oil producers cannot forestall the downturn by increasing production. And if a recession does occur, adding more barrels risks crashing oil prices and hurting their own economy.
Youssef Alshammari, CEO and head of oil research at CMarkits in London, said oil producers are aware that the economic impact of the rate hike has yet to be felt in the oil market and they are acting accordingly.
OPEC alone cannot prevent a recession, said Amena Bakr, OPEC’s chief correspondent at Energy Intelligence. “I think that recession cannot be avoided… The state of the economy cannot be sustainable. There has to be a crash and a reboot at some point,” she said.
At its most recent meeting on June 2, OPEC had already agreed to increase production by 648,000 bpd in July and August, up from the 432,000 bpd originally agreed until September.
“It would be a good gesture” to help control inflation in the United States in the short term, Alshammari said.
But Saudi Arabia, the producer with the most spare capacity, is sounding the alarm about the declining ability of oil countries to continue producing more oil.
“The world needs to come to terms with the reality,” Saudi Energy Minister Prince Abdulaziz bin Salman told Bloomberg in May. “The world is running out of energy capacity at all levels.”
Digest
US Special Envoy Malley to meet Qatari Foreign Minister in Doha over possible talks with Iran
US Special Envoy for Iran Robert Mulley is expected to meet Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman Al Thani in Doha on Monday, a diplomatic source briefed on the visit told CNN. The source added that Iranian negotiator Ali Bagheri Kani will meet with Qatari officials the next day.
- Background: The high-level visits came after EU foreign policy chief Josep Borrell told a press conference in Tehran on Saturday that his team would mediate possible future indirect talks between the US and Iran “in the Gulf country.” The talks will focus on “unresolved issues” related to the implementation of the 2015 nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA). While Iranian state media have reported that Qatar will host these indirect bilateral talks, Doha has not confirmed that it is hosting them.
- Why is it important: Western powers fear that Iran is moving closer to building a nuclear bomb if it decides to do so, although Iran says its intentions are peaceful. Ali Shamkhani, secretary of Iran’s Supreme National Security Council, which makes decisions for Tehran in nuclear talks, told Borrell that Iran will continue to develop its nuclear program until the West changes its “illegal behavior.”
Erdogan to meet leaders of Sweden and Finland ahead of NATO summit
Turkish President Recep Tayyip Erdogan will take part in a round of talks with the leaders of Sweden and Finland, as well as NATO on Tuesday ahead of the NATO summit in Madrid on Wednesday, Turkish presidential spokesman Ibrahim Kalin said on Sunday. He said that Erdogan’s presence at the talks “does not mean that we will retreat from our position.”
- Background: Finland and Sweden applied to join NATO in response to Russia’s invasion of Ukraine. But the bids have faced resistance from Turkey, which has been outraged by what it calls Helsinki and Stockholm’s support for Kurdish militants and an arms embargo on Ankara.
- Why is it important: Kalin said Turkey and the Nordic countries had largely agreed on issues in preliminary discussions and would be in a better position in Madrid if they could agree on them during talks on Tuesday. Turkey said earlier this month that the documents it received from Sweden and NATO in response to its earlier written demands for two candidates fell far short of its expectations. Kalin has previously stated that the Madrid summit is not a deadline.
Iran says Saudi Arabia wants to resume diplomatic talks with Tehran
Saudi Arabia wants to resume diplomatic talks with Tehran, Iranian Foreign Ministry spokesman Saeed Khatibzadeh said at a press conference on Monday, a day after the Iraqi prime minister pushed for resumption of talks between regional rivals. Iraqi Prime Minister Mustafa al-Qadimi was in Tehran on Sunday, the day after his visit to Saudi Arabia.
- Background: Iran and Saudi Arabia severed ties in 2016, and both sides supported allies waging proxy wars across the region, from Yemen to Syria. The fifth round of talks between them took place in April, after Iran suspended talks in March.
- Why is it important: Kadhimi’s visit has been a months-long stalemate in indirect talks between Tehran and Washington that are expected to break off in the coming days to conclude a 2015 nuclear pact that curbed Tehran’s nuclear program in exchange for sanctions relief. During Biden’s visit to Riyadh in mid-July, the talks are expected to touch on security issues in the Gulf states related to Iranian ballistic missiles.
By region
The Arabic comic has become the center of a new controversy with outraged social media users in the Arab Gulf countries accusing it of normalizing homosexuality among children.
Published in the UAE, Majed, one of the oldest children’s comics in the Gulf region, featured a rainbow character in its May issue that turned everything it touched into rainbow colors.
The campaign comes as many in the region are boycotting foreign businesses for their solidarity with Pride Month, which falls in June, but it stands out in that it targets a regional brand that is a household name for many children.
The UAE Media Regulatory Authority and Abu Dhabi Media Company, the magazine’s publisher, did not respond to CNN’s request for comment.
Mohammed Abdelbari
Photo of the day
This story has been updated to correct the day of the OPEC meeting for Thursday.
