Oil ministers from Opec and other oil producing countries meet in Vienna today for two days of discussions about how to counter the drop in prices over the past two months.
As reported by AFP, Opec members are considering cuts in output to boost prices, defying calls by US President Donald Trump that they keep the taps open.
"We're looking for a sufficient cut to balance the market, equally distributed between countries," Saudi oil minister Khalid al-Falih told reporters ahead of the meeting in the Austrian capital.
The price of a barrel of Brent, the European benchmark, fell four percent to below $60 on Thursday December 6th, hit by the Saudi comments which the markets interpreted as very cautious and showing concern over an economic slowdown.
Oil prices have been rising steadily since late 2016, when Opec's 15 regular members joined forces with other countries, notably Russia, to scale back output in a bid to reduce a glut that was keeping prices low. Over the past two months, however, prices have plunged again.
In an effort to counter this, the so-called OPEC+ group, who together account for more than half of the world's oil output, is discussing renewing the pact or possibly cutting output still further.
The likelihood is that more reductions in output will be approved, despite the pressure from Trump, who argues that higher energy costs will hold back the economy.
However, there are several complications.
One is that Iran, Opec's third-biggest producer, wants to be exempted from any output-reducing measures.
Given the economic sanctions being reimposed by the United States, the Islamic republic "doesn't join any agreement for cutting production because of the special situation Iran faces," its oil minister, Bijan Namdar Zanganeh, said.
Another is Trump’s intervention.
Trump has continued to support Opec kingpin Saudi Arabia, despite worldwide outrage over the recent Khashoggi murder, but he is at the same time keeping up the pressure for lower prices.
"The big unknown is how President Trump will react to any production cuts," said analysts at ING, a bank.
Some Opec countries feel that Saudi Arabia wields too much clout in setting policy, so they may be tempted take Trump’s position in the talks, taking advantage of the Saudis’ delicate situation. Negotiations between Opec members are often fraught affairs.
However, the fact that Qatar, an Opec member since 1961, is quitting the cartel next month is unlikely to add to the difficulties facing the group.
Doha accounts for only around 2% of Opec output and now wishes to concentrate on gas production.