Energy ministers from the oil exporters' group Opec gather in Vienna on Thursday for their regular discussions on oil prices. They have a problem. The price of crude oil is too low for (their) comfort. In the past, Opec has taken action in similar circumstances, cutting production in an attempt to drive prices higher. But in this current episode of relatively cheap oil, Opec has been unable to agree any action. Here is Opec's problem: oil is now trading at about $50 a barrel for Brent crude - a UK type of oil that is widely used as a benchmark. That's less than half the level it reached in June 2014.
The current price is well up from the lows it hit in January of about $27, but it is still low enough to be a problem for Opec members. For most of these countries oil is the main source of government revenue. Focusing on oil exporters in the Middle East and North Africa the IMF said in a report in April: "The fiscal adjustment [in government spending and taxation] needed to absorb the oil price shock is unprecedented." Last year, the IMF says, export revenues for this group of oil suppliers fell by $390bn (£266bn), equivalent to 17.5% of their national income, or GDP.
Shale pressure
So why the inaction on Opec's part? Why have they repeatedly failed to agree on collective action to address what is a problem for them all? When Opec has cut production in the past, it has generally been Saudi Arabia, the group's biggest oil producer, which has made the most substantial moves. The kingdom has been called the swing producer - the one whose decisions are most capable of turning the market round. This time Saudi Arabia has been reluctant to act alone. Yes, it would prefer higher prices, but it does see a silver lining, some benefit from the weakness in the market.
Cheap oil generates pressure on American shale oil producers. That is an industry that has grown rapidly in the last decade, and it is the major factor behind plentiful supplies of oil that drove prices down from the 2014 high. Back in April, it did look as though Opec, together with a few other oil producers (including Russia) were finally going to do something to underpin oil prices. Not full-on cuts in production, Opec's traditional price weapon. They were discussing a more modest step, an agreement not to increase output - a production freeze as the idea was called at the time.
Saudi-Iran relations