Opec is unlikely to clinch Algiers accord
Iran, Iraq signal resolve to increase output, while Saudi Arabia is maintaining near-record supply
Opec probably won’t clinch a deal to limit oil production in Algiers next week as members stay focused on either boosting output or defending their market share, according to a Bloomberg survey.
The Organisation of Petroleum Exporting Countries (Opec), which will hold informal talks with Russia on September 28, faces the same internal rivalries that thwarted a previous agreement in April, according to all but two of 23 analysts surveyed. Iran and Iraq have signalled their resolve to increase output, while group leader Saudi Arabia is maintaining nearrecord supply.
Christoph Eibl, co-founder and chief executive officer of commodity asset manager Tiberius Group, said Tuesday in a Bloomberg Television interview: “The incentives for Saudi [Arabia], for Iran are all the same: increasing output.”
Opec Secretary-General Mohammad Barkindo has damped expectations, saying the talks are for consultation rather than decision-making. Yet the planned meeting drove up oil prices last month on speculation members may revive a proposal to freeze production with market rival Russia. President Vladimir Putin said September 2 that producers can overcome the dispute that derailed the April deal, which failed when Saudi Arabia insisted Iran join in.
Iran, which was just starting to restore output after being released from international sanctions, had refused. The chances of an accord are better now as Iran is pumping at pre-sanctions levels, according to Natixis SA. “There is a great window of opportunity for a freeze here,” said Abhishek Deshpande, chief energy analyst at Natixis, who still considers a deal unlikely.
Iranian President Hassan Rouhani said September 6 that it’s still “vital” for the country to make up for the output it lost during years of sanctions. That means raising production to “slightly” more than 4 million barrels a day, from 3.8 million currently, before joining discussions on a cap, according to Mohsen Ghamsari, director for international affairs at state-