Opec agrees to boost oil output after reaching Iran compromise
Opec has agreed to boost oil production, achieving a last-minute compromise that overcame Iran’s threats to veto any supply hike.
“We have an agreement” to make a 1 million barrel-a-day adjustment on paper to the production cuts implemented by the group in cooperation with allies including Russia, Saudi energy minister Khalid Al-Falih told reporters in Vienna. In reality, the accord adds 600,000 barrels a day of oil to the market, about 0.5% of global supply, because several members are unable to raise output, said a delegate.
The new deal would effectively roll back the deeper-than-intended cuts from nations such as Venezuela, returning the curbs to the level originally agreed in 2016, the delegate said.
The accord is a much-needed show of unity from the Organization of Petroleum Exporting Countries and allies including Russia. An agreement was in doubt after Iranian oil minister Bijan Namdar Zanganeh walked out of a meeting on Thursday evening. Iran had bridled at complaints on Twitter by US President Donald Trump that the cartel was artificially inflating oil prices, which touched $80 a barrel last month. Zanganeh has said the president is to blame for high prices because of his unilateral withdrawal from the international nuclear agreement and the imposition of fresh sanctions that could significantly curb Iran’s crude exports.
Opec and its allies exceeded their pledged 1.8 million barrels a day of production cuts by 47% last month. Those additional supply losses have been largely unintentional, reflecting the collapse in Venezuela’s oil industry and long-term declines in Mexican output.
LONDON/KUWAIT: