OPEC+ oil producers head into meeting with quota unease and geopolitical risks casting a shadow

The influential Organization of Petroleum Exporting Countries and its allies, collectively known as OPEC+, convene to decide next production policy steps on Thursday, in a postponed virtual meeting overshadowed by conflict in the Middle East, internal disgruntlement and the imminent expiry of a key Saudi supply cut.

All eyes have turned on whether the OPEC subset of the group — steered by heavyweight Saudi Arabia — will have mended its differences, after sources told CNBC that Angola and Nigeria objected to lower baselines for next year. Baselines, levels off which cuts and quotas are decided, have been a bone of contention within OPEC+, stalling talks amid UAE pushback in the summer of 2021.

Angola and Nigeria have struggled with declining output amid underfunding, spare capacity depletion and infrastructural sabotage. But accepting lower baselines would pose risks in the event of future output recoveries. The two countries' baselines for 2024 — and implicitly their production quotas — were due to be studied following assessment from three independent data providers.

Two OPEC+ delegates, who could only speak anonymously because of the sensitivity of discussions, told CNBC Tuesday that a compromise had yet to be reached, as the clock ticks toward key meetings between OPEC, OPEC+ and their technical committee.

The gatherings were initially scheduled as in-person meetings last weekend in Vienna, before a last-minute downgrade to virtual conferences. Their new date overlaps with the first day of the 2023 United Nations Climate Change Conference (COP28) hosted by key OPEC member the UAE, which is trying to raise its profile as a champion of the green transition.

Beyond internal strife, OPEC+ has been contending with a perceived disconnect between prices and supply-demand fundamentals, which has frustrated the group — including Saudi Energy Minister Prince Abdulaziz bin Salman, who warned market speculators they should "watch out" in May.