Gulf oil producers yet to agree on unified position to raise crude output

VIENNA: Saudi Arabia is struggling to convince fellow Opec members including Gulf allies on the need to raise oil output, sources familiar with the talks said on Wednesday, adding to complications ahead of an Opec meeting this week.

The Organisation of the Petroleum Exporting Countries (Opec) meets on Friday to decide on output policy amid calls from major consumers such as the United States and China to cool down oil prices and support the global economy by producing more crude.

Iran said on Tuesday Opec was unlikely to reach a deal, setting the stage for a clash with Saudi Arabia and Russia, which are pushing to raise production steeply from July to meet growing global demand. Saudi Arabia was too quick to respond to US calls for higher production, and have been rattled by Riyadh’s close coordination with non-Opec Russia, sources said.

There are different views on how much to increase production and whether such a move should be gradual, one source said following a meeting of Gulf oil ministers on Tuesday evening.

Russia has proposed Opec and non-Opec raise output by 1.5 million barrels per day (bpd), effectively wiping out existing production cuts of 1.8 million bpd that have helped rebalance the market in the past 18 months and lifted oil to $75 per barrel. Oil was trading as low as $27 in 2016.

Opec members Iran, Iraq, Venezuela and Algeria have opposed a relaxation of production cuts, fearing a slump in prices.

But Opec could still agree a lastminute deal on Friday by compromising on a lower output increase below one million bpd, Opec sources have said.