Deal to gradually boost Opec output ‘inevitable’, says Saudi

Saudi Arabia’s oil minister said it’s “inevitable” that Opec and its allies will agree to boost oil output gradually, giving the most definitive signal yet that the cartel will alleviate high prices for consumers.

“I think we’ll come to an agreement that satisfies most importantly the market,” Khalid Al-Falih told reporters in Moscow on Thursday, when asked about the outcome of the meeting between the Organization of Petroleum Exporting Countries (OPEC) and its allies, to be held in Vienna next week. “I think it will be a reasonable and moderate agreement” but nothing “outlandish”, he said.

Russia and Saudi Arabia, leaders of the deal that curbed crude output and boosted prices to three-year highs, were scheduled to discuss their next move, in Moscow, on Thursday.

They face growing pressure, not least from US President Donald Trump, to increase supply to offset disruptions caused by the economic crisis in Venezuela and renewed American sanctions on Iran.

For Al-Falih, the assertion of inevitability is a gamble on his ability to persuade those two nations to drop their opposition to an output increase in face-to-face meetings in the Austrian capital next week.

So far, Caracas and Tehran have been adamant that Opec doesn’t need to boost production this year, and have warned against succumbing to pressure from Washington.

“The Trump administration is trying to intervene in the affairs of a sovereign organization,” Hossein Kazempour Ardebili, the most senior Iranian official attending OPEC meetings after the oil minister, said in an interview on Wednesday. Such attempts have failed in the past and “they will also fail” this time, he said.

Iraq, Opec’s second-largest producer, said the group should resist pressure to increase supplies because the curbs haven’t yet achieved their purpose, with crude prices still below the desired level. Both Russia and Saudi have proposed plans for the so-called OPEC+ group to add as much as 1 million barrels a day, about one per cent of global output, although Riyadh prefers a smaller increase, according to people familiar with the matter.