LONDON/DUBAI/MOSCOW: OPEC+ debated on Thursday whether to keep deep oil output cuts in place or ease them after the new US administration resumed Donald Trump's practice of calling OPEC leader Saudi Arabia over policy and said energy should be kept affordable.
Jennifer Granholm, the new energy secretary appointed by US President Joe Biden, said on Twitter she had spoken to Saudi Energy Minister Prince Abdulaziz Bin Salman.
"We reaffirmed the importance of international cooperation to ensure affordable and reliable sources of energy for consumers," she wrote, adding a further reason for the group to consider a production hike.
Brent rose 2% to climb above $64 a barrel on Thursday, up more than 20% since the start of 2021 and near this year's high.
Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman also spoke on Thursday.
The Organization of the Petroleum Exporting Countries and allied producers, a group known as OPEC+, have cut output by almost 7 million barrels per day (bpd) to support prices. In addition, Saudi Arabia has made an extra 1 million bpd voluntary cut.
Thursday's virtual meeting of OPEC+ started at 1225 GMT.
"The picture is still not clear," one source said going into the talks.
In the run up to the meeting, OPEC+ delegates had said the group would likely keep most of those cuts in place, given a weak demand outlook because of new coronavirus lockdowns.
But the mood changed in the past 24 hours. The group is now deliberating whether to roll over the cuts or raise output, three OPEC+ sources said. The increase could amount to 0.5 million bpd, two sources said.
It was not clear if Granholm's call influenced the shift.
'CAUTIOUS STANCE'
Prince Abdulaziz opened the meeting by telling ministers: "Until the evidence of recovery is undeniable, we should maintain this cautious stance."
Russia's Deputy Prime Minister Alexander Novak offered a slightly more bullish overview saying the global economy was recovering and an oil deficit has emerged.
In the past, Trump had used his influence to force Saudi Arabia to adjust output policy. When prices spiked, he insisted OPEC raise production. When oil prices collapsed last year, he called Saudi Arabia and Russia to clinch record oil output cuts, helping the US shale oil industry.
Biden's administration, which had at least until this week refrained from such an approach, has had much cooler dealings with Riyadh, imposing sanctions on some Saudi citizens over the 2018 murder of Jamal Khashoggi.
When the OPEC+ decision on March 4 to keep steady drove prices up, the White House made no direct comment.
Reuters reported last month that no member of Biden's team had until then reached out to OPEC.
Adding to factors that could affect OPEC+ deliberations, some OPEC members have expressed frustration that non-OPEC Russia and Kazakhstan supported a broad rollover of existing cuts while also requesting small increases for themselves for a third month running, OPEC+ sources said.
Iran, whose output has been severely crimped by US sanctions, could also become a topic for discussion after it emerged Iranian exports were on the rise, especially to China.