India Urges OPEC Nations To "Fill Supply Gap", Ensure Sustainable Prices

Share

Three Opec members - Iran, Venezuela and Iraq - have been reluctant to consent to a formal increase in Opec's output target, agreed as part of a deal with Russian Federation and other non-member producers and running until the end of 2018.

Once known for rampant cheating on agreed oil output targets, the Organization of the Petroleum Exporting Countries has been over-delivering on a pact in place since January 2017, cutting around one and a half times the promised amount.

Saudi Arabia, backed by non-member Russian Federation, is now racing to convince the alliance to raise production again in order to meet growing demand in the second half of 2018.

Zanganeh urged OPEC to resist calls from Donald Trump to change its output policy.

So far there is no indication that Iran and the other members would agree to such a reallocation, although with officials holding extensive talks in the run-up to Friday's Opec meeting, further compromise could be made.

"We need to release supply to the market", Saudi Arabian Energy Minister Khalid al-Falih told reporters in Vienna.

More news: Beyonce and Jay-Z shot the dramatic clip at the Louvre

Other OPEC-members, including Iran, are against such a move, fearing a sharp slump in prices. Sources said a production rise of about 1 million bpd was emerging as a possible consensus for OPEC and its allies, adding that Iran could assent under certain conditions.

When OPEC and its allies, which include Russia, Kazakhstan and Mexico, agreed to cut output in late 2016, they announced a 1.8 million-barrel-a-day reduction.

Benchmark Brent crude fell US$1.76 a barrel, or more than 2 percent, to a low of US$72.98 before recovering slightly to US$73.34, down US$1.40, by 0945 GMT. Pradhan said India does not support the prevailing high price.

"There is a lot more at stake than just ticking a box and say: 'we got this out of the way", the minister said, nothing that "timing isn't critical for the government of Saudi Arabia".

Washington and Beijing have both threatened punitive tariffs on each other's exports, including USA crude oil. Riyadh could also act unilaterally boosting output, as it did in 2011 after a meeting ended in acrimony without a deal.

Share