OPEC producers are trying to negotiate a compromise deal that could result in the cartel boosting production by between 300,000 bpd and 600,000 bpd over the next few months, Bloomberg reported on Monday, citing people briefed on the talks.
OPEC’s largest producer and de facto leader Saudi Arabia and Russia, the leader of the non-OPEC group of producers in the OPEC/NOPEC production deal, are lobbying for reversing some of the production cuts that have been in place since January 2017. But some OPEC members—including Iran, Venezuela, and Iraq—are opposing an increase in production and argue that the pact should stay in tact through the end of 2018, as planned.
The three biggest dissenters with the Saudi-led campaign to boost production will veto Riyadh’s proposal at this week’s meeting in Vienna, Iran’s OPEC governor Hossein Kazempour Ardebili told Bloomberg over the weekend.
“Three OPEC founders are going to stop it,” Kazempour Ardebili told Bloomberg on Sunday, referring to the Saudi push for boosting oil production.
“If the Kingdom of Saudi Arabia and Russia want to increase production, this requires unanimity. If the two want to act alone, that’s a breach of the cooperation agreement,” Iran’s representative to the cartel said.
Although Iran is firmly against any production boost, officials from several other OPEC countries believe that the cartel can reach a deal on a relatively modest increase, according to Bloomberg’s sources.
Some OPEC producers would favor an increase at the lower end of the 300,000 bpd-600,000 bpd range, one of the sources said.
Meanwhile, Russia’s Energy Minister Alexander Novak said in Saudi Arabia on Saturday that Russia and Saudi Arabia would ask OPEC to increase production by 1.5 million bpd in the third quarter only, because of the high seasonal demand, and re-evaluate the boost in September.
OPEC is up for a heated meeting later this week, at which various proposals will be discussed. By Tsvetana Paraskova for Oilprice.com