Iran to oppose proposal to raise OPEC crude output

Iran to oppose proposal to raise OPEC crude output

Tensions spiked last night when Iranian Oil Minister Bijan Zangeneh stormed out of the Joint Monitoring Committee Meeting and told journalists that it was not a good meeting and a deal was "unlikely".

"We will do whatever is needed to maintain market stability and ensure that there are no oil supply shortages", Saudi Prince and minister of state for energy affairs Abdulaziz bin Salman said at a petroleum conference in Vienna. He echoed earlier comments from OPEC Secretary-General Mohammad Barkindo.

But Saudi Arabia has the powerful backing of Russian Federation, which is facing mounting calls from domestic oil firms to end the cutbacks so they can cash in on the higher oil prices.

Saudi Arabia and its allies estimate that total cuts now amount to 2.8 million barrels. At the morning's press scrum at OPEC headquarters in Vienna, ministers were confident that a deal would be struck to increase production by one million barrels per day (Mbd). They will discuss with OPEC on Saturday on whether to increase their production.

Questions remain, however, over the ability of some OPEC nations - Iran and Venezuela in particular - to increase production as they struggle with domestic turmoil and sanctions.

Tehran is concerned that an increased supply of crude on the market would make it easier for the USA to pressure allies to support a ban of Iranian oil similar to the one imposed under the Obama administration. If we lose a million bpd of output from Venezuela and Iran in the fourth quarter, where will all these barrels come from?

Falling production in Venezuela and Libya, as well as the risk of lower output from Iran as a result of USA sanctions, have all increased market worries of a supply shortage. Venezuela's oil industry is collapsing due to years of mismanagement and an economic crisis.

More news: North Korea Denuclearization Has Already Started, Says Trump

Analysts had expected OPEC to announce a real increase in production of 500,000 to 600,000 barrels per day (bpd), which would help ease tightness in the oil market without creating a glut.

High volume oil consumers like India seem to be heading for some relief, with crude oil prices falling sharply on Thursday as major oil exporters indicated that a consensus on increasing crude oil production was near.

Trump's involvement makes it hard for Tehran to accept a compromise. U.S. President Donald Trump has been calling publicly for the cartel to help lower prices.

But analysts said trade concerns and disagreements within the Organization of the Petroleum Exporting Countries (OPEC) over boosting supply continue to loom over the market.

The prince, who is Saudi minister of state for energy affairs, was speaking at the OPEC seminar in Vienna, ahead of what is likely to be a hard meeting. Data from the International Energy Agency indicate that Saudi Arabia would be able to pump an extra 30,000 bpd above May levels, and Qatar could add 10,000. "Stay tuned." A decision to increase output could be taken with Iran refusing to sign up, as has happened before in Opec.

Sultan Al Jaber, chief executive officer of ADNOC, gestures as he speaks during the opening day of the 7th OPEC worldwide seminar in Vienna, Austria.

-With assistance from Salma El Wardany, Annmarie Hordern, Manus Cranny, Elena Mazneva, Laura Hurst, Javier Blas, Grant Smith, Francois de Beaupuy and Golnar Motevalli.

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