Opec agrees to hike oil output INDIA EYES RUPEE PAYMENT FOR IRANIAN OIL

Vienna/London, June 22: Opec on Friday agreed on a modest increase in oil production from July after its leader Saudi Arabia persuaded arch-rival Iran to cooperate amid calls from major consumers to help reduce the price of crude and avoid a supply shortage.

Two Opec sources said the group agreed that Opec and its allies led by Russia should increase production by about 1 million barrels per day (bpd), or 1 per cent of the global supply.

The real increase will be smaller because several countries that recently underproduced oil will struggle to return to full quotas while other producers will not be allowed to fill the gap, Opec sources have said.

The US, China and India had urged Opec to release more supply to prevent an oil deficit that would hurt the global economy.

Saudi Arabia and Russia said they were happy to pump more but Iran had criticized the idea as it faces export-crippling US sanctions.

Iran, Opec’s third-largest producer, had demanded Opec reject calls from US President Donald Trump for an increase in oil supply, arguing that Trump had contributed to a recent rise in prices by imposing sanctions on Iran and Venezuela.

Meanwhile, oil prices rose as much as 2 per cent on Friday as Opec neared a deal to increase output to compensate for losses in production at a time of rising global demand.

— Reuters New Delhi, June 22: India is looking to revive a rupee trade mechanism to settle part of its oil payments to Iran, fearing foreign channels to pay Tehran might choke under pressure from US sanctions, two government sources said.

During a previous round of sanctions, India devised a barter-like scheme acceptable to Washington to allow it to make some oil payments to Tehran in rupees through a small state bank. Iran used the funds to import goods from India. “We are looking at reviving rupee mechanism ... we have to prepare ourselves,” one of the sources told Reuters, adding that the current payment mechanism might not work.

A commerce ministry official said RBI had yet to decide on moving back to the rupee payment mechanism. In May, Donald Trump withdrew from a 2015 nuclear accord with Iran and ordered the reimposition of sanctions. — PTI