Saudi-dominated OPEC cartel 'agrees tiny cut in daily oil production'

Iran has given OPEC a green light to cut oil output by around 0.8 million barrels per day from 2019, an OPEC source told Reuters on Friday.

MENA

2 min read

The New Arab & agencies

07 December, 2018

Saudi-dominated OPEC is the world's foremost oil cartel [Getty]

Saudi-dominated OPEC has cleared a main obstacle towards agreeing a cut in daily oil production at the organization's meeting in Vienna.

Iran has given OPEC a green light to cut oil output by around 0.8 million barrels per day from 2019, an OPEC source told Reuters on Friday.

OPEC will later ask non-OPEC producers to contribute an additional 0.4 million bpd to the cuts, the source added.

OPEC countries are mulling a possible cut to oil production in an attempt to stabilise prices as they meet for a second straight day in Austria.

Heavyweight Saudi Arabia has been pushing a cut of about 1 million barrels a day, but the oil cartel was not able to make a decision on Thursday.

Analysts say they're likely waiting to hear from non-OPEC Russia to better coordinate the cut.

Heading in to Friday's meeting in Vienna, Nigerian Petroleum Minister Ibe Kachikwu told reporters he was "hopeful" the nations would be able to reach an agreement.

Ahead of the meeting Brent, the international standard, was down 59 cents at $59.47 a barrel while benchmark New York crude was 61 cents lower at $50.88.

Oil prices have fallen about 25 percent in recent months.

The issue of oil prices and output has caused tensions between allies the US and Saudi Arabia, with Saudi energy minister Khalid al-Falih saying on Thursday his country did not need anyone's permission to alter its production.

"I don’t need approval from any foreign state when it comes to the issue of energy production," Saudi Energy Minister Khalid al-Falih told reporters on Thursday.

The US "is not in a position to tell us what to do," the minister added, a day after US President Donald Trump urged the cartel to keep the taps open so as to push prices down.

On Wednesday, Trump took to Twitter to urge producers to keep pumping.

"Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!" said Trump, who has repeatedly accused the cartel of keeping prices artificially high.

But Saudi minister al-Kalih pointedly said Washington should back off.

"We're looking for a sufficient cut to balance the market, equally distributed between countries," al-Falih said ahead of an OPEC meeting in the Austrian capital.

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