OPEC meets Russian Federation and allies to agree oil output boost

Oscar PerryJun 25, 2018

The group's communique still pledged a return to 100 percent compliance with the original 2016 agreement - ending a period of deeper-than-intended cuts - but Al-Falih insisted that no individual country will be subject to a strict output cap.

Saudi Arabia said the move would translate into a nominal output rise of around 1 million barrels per day (bpd), or 1 percent of global supply, for OPEC and non-OPEC producers.

He said that was with the understanding reached with key non-OPEC participating countries, including the Russian Federation, to contribute a production adjustment of 0.6 mb/d.

OPEC and its allies yesterday gathered for a third successive day of meetings in Vienna to give the final sign-off to an oil production increase.

In real terms, that would add 600,000 to 700,000 bpd of crude to the market over about six months, said Oman's Oil Minister Mohammed Al Rumhy, according to Bloomberg.

Opec and non-Opec producers will meet on Saturday to iron out details of the pact and then again in September to review the deal.

There are also growing signs that the renewed U.S. sanctions on Iran could have a larger effect than a 1 million barrel per day reduction in exports seen in 2012.

Trump slapped fresh sanctions on Tehran in May and market watchers expect Iran's output to drop by a third by the end of 2018.

Japan punish 10-man Colombia in Saransk to make winning start
Colombia equalized late in the first half on Juan Quintero's rolling but accurate free kick, which sneaked inside the right post. A Sweden supporter holds up a scarf ahead of a World Cup Group F match between Sweden and South Korea on June 18, 2018.

In reality, the accord would add a smaller amount of oil to the market, because a number of countries are unable to raise their output.

By not setting individual targets, the OPEC deal appeared to give Saudi Arabia the leeway to produce more than its previous OPEC quota and fill the gap left by those such as Venezuela who can not pump enough to meet their official allocation.

Iran doesn't believe its customers will get waivers from the United States government that would allow them to continue crude purchases, Oil Minister Bijan Namdar Zanganeh said in a Bloomberg television interview on Friday. "Those which can not, will not". "This means that Saudi Arabia can increase its production by less than 100,000 bpd", Zanganeh told Argus Media. The situation in Venezuela is volatile, with a wide range of predictions of how much further its production could slump as its industry unravels. "And if it can not, others can not come in and produce on their behalf", Zanganeh said.

OPEC is not expected to actually release a hard target, but the figures align with comments from ministers that the group will strive to stop overshooting its 18-month-old deal to keep 1.8 million bpd off the market.

But unexpected outages in Venezuela, Libya and Angola have effectively brought supply cuts to around 2.8 million bpd in recent months.

Falih has warned the world could face a supply deficit of up to 1.8m bpd in the second half of 2018 and that Opec's responsibility was to address consumers' worries.

The nonmembers were to approve the deal, which was sealed on Friday after a last-minute compromise between Saudi Arabia and Iran, four delegates said. Much will depend on how much extra crude comes back on to the market, the robustness of American shale drillers, the fate of Venezuela's crisis-hit oil industry and the impact of USA sanctions on Iran.

Related Articles:



« Previous article


Popular Pages

Brazil held to 1-1 draw by Switzerland at World Cup
APBrazil joined the list of big teams struggling to win their opening matches at the World Cup in Russian Federation . Sometimes if there is a lack of recognition that is a pity because we have played very well.

European Union tariffs on United States goods come into force
Effective from today (22 June), the tariffs on U.S. goods include a 25% increase on American whiskey and Bourbon. Canada has also threatened to impose retaliatory tariffs on $12.5 billion worth of USA exports, starting July 1.

England boss Gareth Southgate dislocates shoulder in Russian Federation
Speaking to BBC One after the Tunisia win, Kane said: "We have shown resilience for a while now since the gaffer come in". The England manager took training at Spartak Zelenogorsk on Thursday, despite the discomfort of a dislocated shoulder.

Hacker Details Switch's "Extremely Strong Anti-Piracy Measures"
The creators of Rocket League have said they're ready to enable cross-play with PS4 the moment Sony gives them the green light. Nintendo (OTCMKTS: NTDOY ) and Microsoft (NASDAQ: MSFT ) have seen their game console fortunes taking opposite trajectories.

Saudi woman fulfills lifelong dream to drive F1 auto
The ministry declined to disclose how many women had received licenses so far, saying the process is still in the early stages. Many haven't had a chance to take the gender-segregated driving courses that were first offered to women only a few months ago.

Five immigrants dead after Border Patrol car chase in Texas
The driver was not seriously injured and taken into Homeland Security custody, Dimmit County Sheriff Marion Boyd told reporters. He said four people died at the scene, and several were flown by emergency helicopter to a hospital in San Antonio .

Lionel Messi ‘shouldn’t shoulder all the responsibility’, says Jorge Sampaoli
He added: "When we succeed with Argentina , everyone takes credit for it but when Argentina loses, it's always Leo's fault. It's important to take advantage of the spaces which MESSI generates when there's two or three players on him".

Kawhi Leonard Telling Rival Teams He Plans to Sign With LA Team
The former first round pick has been talked about as a potential trade chip between the Spurs and Lakers for Kawhi Leonard . Lakers star Kyle Kuzma added to the discussion on Wednesday night with a tweet that put Lakers fans into a frenzy.

Denmark's Poulsen turns from villain to hero , Latest Football News
It was to prove a costly miss, and Peru must be more clinical if they are to have any chance of qualifying. Denmark also reached Russian Federation via the play-offs, beating the Republic of Ireland.

Sixers trade the 39th pick to Lakers
If the Lakers aren't going to contend next year, why would LeBron go? I think where his family is going to be qualifies the teams. The 2018 draft marked the end of the Lakers' penance for the 2012 sign and trade in which they acquired Steve Nash.