Iran gives green light to Opec oil out­put cut plan

Irish Examiner - - Business - Ra­nia El Ga­mal

Iran has given the Or­gan­i­sa­tion of the Petroleum Ex­port­ing Coun­tries (Opec) the green light to re­duce oil out­put by around 800,000 bar­rels per day (bpd) from 2019, af­ter finding a com­pro­mise with ri­val Saudi Ara­bia over a pos­si­ble ex­emp­tion from the cuts.

Tehran has emerged as a key stick­ing point for a deal, but sources said the dif­fi­cul­ties were now in the past and Opec was re­fo­cus­ing on talks with non-mem­ber pro­duc­ers, led by Rus­sia, to re­duce sup­plies and prop up oil prices.

Opec will pro­pose that non-mem­ber pro­duc­ers con­trib­ute an ad­di­tional 400,000 bpd to the cuts. Opec was meet­ing in Vienna for a sec­ond day run­ning, be­fore dis­cus­sions with its non-Opec al­lies.

Saudi Ara­bia faces pres­sure from US pres­i­dent, Don- ald Trump, to help the global econ­omy by re­frain­ing from cut­ting sup­plies. An Opec out­put re­duc­tion also would pro­vide sup­port to Iran by in­creas­ing the price of oil.

The price of crude has fallen al­most a third since Oc­to­ber, to around $60 a bar­rel, as Saudi Ara­bia, Rus­sia, and the United Arab Emi­rates raised out­put to off­set lower ex­ports from Iran, Opec’s third-largest pro­ducer.

A Rus­sian En­ergy Min­istry source said Moscow was ready to con­trib­ute a cut of around 200,000 bpd, more than the ini­tially sug­gested fig­ure of 150,000 bpd. Rus­sia, Saudi Ara­bia, and the US have been vy­ing for the po­si­tion of top crude pro­ducer in re­cent years.

The US is not part of any out­put-lim­it­ing ini­tia­tive, due to its anti-trust leg­is­la­tion and frag­mented oil in­dus­try.

Pic­ture: AP

Iran’s Minister of Petroleum Bi­jan Nam­dar Zan­geneh speaks prior to the start of a meet­ing of the Opec in Vienna on Thurs­day.

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