OPEC Okays Modest Rise In Oil Supply From July After Iran Cooperates

OPEC Okays Modest Rise In Oil Supply From July After Iran Cooperates

OPEC Okays Modest Rise In Oil Supply From July After Iran Cooperates

The brewing tensions between the world's two largest economies comes ahead of Friday's highly anticipated meeting of oil ministers from around the globe at the Organization of the Petroleum Exporting Countries in Vienna.

Two OPEC sources told Reuters the group agreed that OPEC and its allies led by Russian Federation should increase production by about 1 million barrels per day (bpd), or 1 percent of global supply.

He was echoing comments from his Iranian counterpart, Bijan Namdar Zanganeh, who had rejected any production increase when he arrived in Vienna on Tuesday, saying OPEC shouldn't be doing Trump's bidding.

"The actual effect will be something less because not every country can respond", Saudi Arabia Energy Minister Khalid Al-Falih said.

"It would be nice if we can do it in 2019", al-Falih said at an OPEC conference in Vienna today, Bloomberg reports.

"It will be enough for now but not enough for the fourth quarter to address a decline in Iranian and Venezuelan exports", said Gary Ross, head of global oil analytics at S&P Global.

"One million barrels a day is nominal". Trump has used Twitter to complain about high oil prices - and blame OPEC - twice since April.

OPEC sources also said Iran had demanded that USA sanctions be mentioned in the group's post-meeting communique.

Oil prices have been on a roller-coaster ride over the last few years, with the global marker, Brent, trading above $100 a barrel for several years until 2014, dropping to nearly $26 in 2016 and then recovering to over $80 last month.

He said that there are "many, many options. and we will settle to one of those options".

As for oil prices, the 1 million bpd agreement can be said as the "expected" outcome despite the estimates ranging from 300k to 1.5 million bpd coming into this week.

The cartel's largest producer, Saudi Arabia, wants higher prices but hears President Donald Trump, leader of its most important ally, lobbying openly for lower prices.

The correction in prices have been a continuing trend since May 23, when prices breached the $80 mark after the announcement of new USA sanctions on Iran and ongoing supply disruptions in Libya and Venezuela.

Zanganeh said he thinks $70 per barrel would be a "very good" oil price.

"We're in comprehensive talks with all ministers, especially Saudi Arabia and Iran", Iraq's Oil Minister Jabbar al-Luaibi told reporters on Thursday.

Observers believe a face-saving deal could be brokered if members simply stopped over-complying with the current pact, and agreed to stick to the original reduction quotas - which would bring several hundred thousand more barrels to the market each day.

"We want to prevent the shortage and the squeeze that we saw in 2007-08", Falih said, referring to a time when shortages sent premium-crude-oil prices soaring to an unprecedented $150 per barrel and ushered in a major boom-bust cycle that devastated the oil sector for a decade. Iran is usually not part of the committee, which includes Russia, Saudi Arabia, the UAE, Oman, Kuwait, Algeria and Venezuela.

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