Defusing row, Opec agrees to output hike
Opec energy ministers on Friday said they would be putting more oil onto the market to meet “extra demand”, reaching a lastditch compromise in a spat that had pitted Saudi Arabia against archfoe Iran.
The ministers said they had agreed to boost oil production by around a million barrels a day from July. “I think it will contribute significantly to meet the extra demand that we see coming in the second half,” Saudi energy minister Khalid al-Falih told reporters after a crucial Opec meeting in Vienna.
The tense talks had centred around whether to amend an 18-month-old supply-cut deal between members of the Organization of the Petroleum Exporting Countries and allied countries that has cleared a global oil glut and lifted crude prices. Saudi Arabia, backed by non-member Russia, had argued strongly in favour of increasing production as grumbles in major consumer countries like the United States, India and China have grown about the spike in prices.
But regional rival Iran opposed any changes to the original production-cut deal at a time when its oil industry is facing renewed sanctions over US President Donald Trump’s decision to quit the international nuclear deal with Tehran.
In the end, both sides were able to save face. The current production curb pact calls for participating countries to trim output by 1.8 million barrels a day. But a mix of production constraints and geopolitical factors have seen several nations exceed their restriction quotas, keeping some 2.8 million barrels off the market, according to Opec.