Trouble ahead

2 June 2016 By Andy Critchlow

Britain leaving the EU would present the cartel with a tricky demand problem. Brexit could slow economic growth in Europe and reduce consumption of crude in the world’s third-largest market for fuel. If that happens OPEC may have to cut output, or risk prices falling again.

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The Organization of the Petroleum Exporting Countries (OPEC) meets on June 2 in Vienna.

The meeting of the 13-member oil producing countries’ cartel will be the last before voters in the UK cast their ballot in a referendum on June 23 on whether to remain in the European Union.

The Organisation for Economic Co-operation and Development (OECD) warned on June 1 that a so-called Brexit could reduce confidence and result in a “series of financial shocks” in Britain and other European economies. Real GDP in European countries other than the UK could be around 1 percent lower by 2018 if the UK votes to leave, compared to a scenario where it votes to stay.

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