Iran, Iraq at log­ger­heads with Saudis

Al­ge­ria, Venezuela seek­ing Rus­sian OPEC ac­cord

Kuwait Times - - BUSINESS -

Iran and Iraq are re­sist­ing pres­sure from Saudi Ara­bia to cur­tail oil pro­duc­tion, mak­ing it hard for the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries to reach a global out­put-lim­it­ing deal when it meets to­day. OPEC sources told Reuters a meet­ing of ex­perts in Vi­enna on Mon­day failed to bridge dif­fer­ences be­tween OPEC's de facto leader, Saudi Ara­bia, and the group's sec­ond- and third-largest pro­duc­ers over the me­chan­ics of out­put cuts.

"The re­vival of Iran's lost share in the oil mar­ket is the na­tional will and de­mand of Ira­nian peo­ple," Ira­nian news agency Shana quoted the coun­try's oil min­is­ter Bi­jan Zan­ganeh, who was due to ar­rive in Vi­enna later, as say­ing. OPEC, which ac­counts for a third of global oil pro­duc­tion, agreed in Septem­ber to cap out­put at around 32.5-33.0 mil­lion bar­rels per day ver­sus the cur­rent 33.64 mil­lion bpd to prop up oil prices, which have halved since mid-2014.

Iran has ar­gued it wants to raise pro­duc­tion to re­gain mar­ket share lost un­der Western sanc­tions, when its po­lit­i­cal archri­val Saudi Ara­bia in­creased out­put. In re­cent weeks, Riyadh of­fered to cut its own out­put by 0.5 mil­lion bpd, ac­cord­ing to OPEC sources, and sug­gested Iran limit pro­duc­tion at be­low 4 mil­lion bpd. Tehran has sent mixed sig­nals in­clud­ing that it wanted to pro­duce 4.2 mil­lion bpd. Iraq has also been press­ing for higher out­put lim­its, say­ing it needs more money to fight the mil­i­tant group Is­lamic State.

The ar­gu­ment be­tween Iraq and Saudi Ara­bia mainly fo­cuses on whether Bagh­dad should use its own out­put es­ti­mates to limit pro­duc­tion or rely on lower fig­ures from OPEC's ex­perts. As ten­sions within OPEC mounted, Saudi En­ergy Min­is­ter Khalid Al-Falih said at the week­end that oil mar­kets would re­bal­ance even with­out an out­put-lim­it­ing pact. He had pre­vi­ously said Riyadh was keen for a deal. Falih was not ex­pected to land in Vi­enna be­fore evening, leav­ing lit­tle time for tra­di­tional pre-meet­ing dis­cus­sions with other min­is­ters. "The feel­ing to­day is mixed," In­done­sian En­ergy Min­is­ter Ig­na­sius Jo­nan told re­porters yes­ter­day when asked about the prospects of a deal. "I don't know. Let's see."

Gold­man sees deficit

Brent crude was down more than 2 per­cent, near $47 a bar­rel, af­ter the In­done­sian com­ments. Some an­a­lysts in­clud­ing Mor­gan Stan­ley and Mac­quarie have said oil prices will cor­rect sharply if OPEC fails to reach a deal, po­ten­tially go­ing as low as $35 per bar­rel. Gold­man Sachs, one of the most ac­tive banks in oil trad­ing, said yes­ter­day it saw prices av­er­ag­ing $45 a bar­rel un­til mid-2017 even with­out any OPEC deal and added the mar­ket was likely to move into a deficit in the sec­ond half of 2017.

A year ago, Gold­man was say­ing a global glut would push oil prices to around $20. Prices fell to multi-year lows of $27 per bar­rel in Jan­uary 2016. Be­sides dis­agree­ments with Iran and Iraq, Saudi Ara­bia has also sig­naled it was un­happy with Rus­sia's po­si­tion. Oil min­is­ters from OPEC mem­bers Al­ge­ria and Venezuela trav­elled to Moscow yes­ter­day to try to per­suade non-OPEC Rus­sia to take part in cuts in­stead of merely freez­ing out­put, which has reached new highs in the past year. They made no com­ment as they emerged from their meet­ing. Rus­sian En­ergy Min­is­ter Alexan­der No­vak said he had no plan to travel to Vi­enna but could meet OPEC once it reaches a deal. — Reuters

BASRA: An Iraqi worker op­er­ates valves at the Ru­maila oil re­fin­ery, near the city of Basra, 550 kilo­me­ters south­east of Bagh­dad, Iraq. Iraq's prime min­is­ter says his coun­try will agree to cut pro­duc­tion to boost oil prices. OPEC mem­bers will try to com­plete a pro­duc­tion-cut deal when they meet to­day in Vi­enna. — AP

MU­NICH: Air­planes of Ger­man air­line Lufthansa are parked in front of the Lufthansa ter­mi­nal at the Franz-Josef-Strauss air­port in Mu­nich, south­ern Ger­many yes­ter­day. — AFP

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.