Sliding oil prices continue to plague global economies. With prices falling back to $40 a barrel in the last few weeks, jittery OPEC members are at a loss of how to halt the descent. To deal with the problem, the oil cartel announced plans on Monday to hold an unscheduled meeting late next month in Algeria. Non-OPEC member Russia, the world's largest oil producer, will be joining the "informal" meeting.
The pronouncement of an OPEC meeting, to be held on September 26 to September 28, sent oil prices soaring 3% on Monday to $43 a barrel.
Despite the insistence by Mohammed Bin Saleh Al-Sada, the president of OPEC and Qatar's energy minister, that the oil price slump is "only temporary" and the market remains on track to recover, the idea of the informal meeting underlines the precarious situation facing many countries that rely on oil to keep their economies afloat.
OPEC has been pumping oil at a feverish pace the last two years, in an effort to win back its market share from the U.S.
Saudi Arabia, the powerful leader of OPEC, has been forced to impose severe budget cuts that have resulted in a wave of job cuts and last week, India was forced to come to the rescue of thousands of its starving citizens in Saudi Arabia who lost their jobs and were stuck in migrant camps with poor conditions.
At the same time, Russia's economy has been hit by cheap oil and sanctions from the West and has had cut its defense spending despite tensions with the West.
The impromptu meeting is a sign of renewed cooperation among oil producers and is "indicative of the significant pressure some of the producers are under in terms of their economies." However it doesn't mean the divided cartel will be able to agree on production limits, let alone production cuts. OPEC and non-OPEC producers met in Doha in April failed to agree on anything.
The biggest obstacle to any OPEC agreement remains Iran, which has declined to even consider a production freeze until its output returns to pre-sanctions level.
Meanwhile, cheap crude in Texas, North Dakota and other oil-producing parts of the U.S. has made American oil production reach near all-time highs, but the numbers have slowed down over the past year because prices have fallen below what's needed to turn a profit.