Iran gives green light to Opec oil output cut plan
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.
Iran’s Minister of Petroleum Bijan Namdar Zangeneh speaks prior to the start of a meeting of the Opec in Vienna on Thursday.