Oil output increase ‘inevitable’: Al Falih
moscow — Saudi Arabia’s oil minister said it’s “inevitable” that the Opec and its allies will agree to boost oil output gradually, giving the most definitive signal yet that the group 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 Organisation of Petroleum Exporting Countries and its allies 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 threeyear highs, will discuss their next move in Moscow on Thursday as the two nations face off in the Fifa World Cup. They face growing pressure, not least from the Twitter account of 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 the Opec doesn’t need to boost production this year, and have warned against responding to political pressure from Washington.
“The Trump administration is trying to intervene in the affairs of a sovereign organisation,” 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, the Opec’s second-largest producer, said the group should resist pressure to increase oil supplies because its curbs haven’t yet achieved their purpose, with crude prices still below the desired level.
At Thursday’s football match, Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman, along with Al-Falih and his Russian counterpart Alexander Novak, discussed how to boost oil production while maintaining their petro-alliance and overcoming opposition. Both nations have proposed plans for the so-called Opec+ group to add as much as one million barrels a day, about one per cent of global output, although Riyadh prefers a smaller increase, according to people familiar with the matter. — Bloomberg