Saudis say boosting OPEC, allies’ output is ‘inevitable’ soon

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 Thursday in Moscow, when asked about the outcome of the meeting between the Organization 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, discussed their next move in Moscow on Thursday where the Russian soccer team defeated the Saudis, 5-0, at the World Cup. They face growing pressure, not least from the Twitter account of U.S. President Donald Trump, to increase supply to offset disruptions caused by the economic crisis in Venezuela and renewed American sanctions on Iran.

Iran, Venezuela resist

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 responding to political 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 secondlargest 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 soccer match, Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman, along with AlFalih and his Russian counterpart Alexander Novak, were expected to discuss how to boost oil production while maintaining their petro-alliance and overcoming opposition.

Both nations have proposed plans for the socalled OPEC+ group to add as much as 1 million barrels a day, about 1 percent of global output, although Riyadh prefers a smaller increase, according to people familiar with the matter. The two countries share a common view that production should increase gradually, but the precise volume of oil that could be returned to the market and the timing of the boost are still under discussion, Novak said in an interview earlier on Thursday.