OPEC Fails to Agree on Cutting Oil Production

The talks of OPEC governors and representatives lasted over 11 hours as it appeared that there was no agreement on Iraq and Iran's production level
OPEC Fails to Agree on Cutting Oil Production
OPEC Fails to Agree on Cutting Oil Production

OPEC officials meeting in Vienna to work out the details of their plan to reduce oil production failed to reach agreement after hours of talks on Friday, amid objections by Iran which has been reluctant to freeze its output, OPEC sources said.

The High Level Committee of experts will meet again in Vienna on Nov. 25 ahead of the next meeting of OPEC ministers on Nov. 30, to "finalize individual quotas", one source said, Reuters reported.

They will also meet as scheduled on Saturday with representatives of non-OPEC producers, which OPEC wants help from in curbing supplies.

"Yes, we continue tomorrow with non-OPEC," one of the sources said. "(There was) no complete agreement today since Iran refuses to freeze production."

"We didn't finish all. We are looking to the next meeting on November 25 to finalize individual quotas," another source said.

The meeting of the High Level Committee is comprised mainly of OPEC governors and national representatives - officials who report to their respective ministers.

The sources said that talks lasted over 11 hours on Friday as it appeared that there was no agreement on Iraq and Iran's production level.

The Organization of Petroleum Exporting Countries had agreed last month in Algiers to reduce their production of crude oil to a range of 32.50 million to 33 million barrels per day, OPEC's first output cut since 2008, in an effort to prop up prices.

But from the outset the proposed plan faced potential setbacks with Iraq wanting to be exempt from cuts and countries including Iran, Libya and Nigeria whose output has been hit by sanctions or conflict also wanting to raise their output.

"It is getting complicated," a delegate said before the meeting began on Friday. "Every day there is a new issue coming up."

------- Silver Lining

Other OPEC officials including Secretary-General Mohammed Barkindo remained optimistic that members can reach a meaningful agreement.

"Our deliberations today, and tomorrow with some non-OPEC producers, could very well have fundamental ramifications for the market, as well as for the medium to long term of the industry," Barkindo said in a speech on the opening day of the two-day meeting, according to a text provided by OPEC.

The committee does not decide policy and will instead make recommendations to the next OPEC ministerial meeting on Nov. 30.

Iraq, OPEC's second-biggest producer, said earlier this week that it would not cut output and should be exempted from any curbs as it needs funds to fight the terrorist outfit known as the Islamic State.

Meanwhile Iran has insisted on its right to recover market share after sanctions were lifted in January.


Add new comment

Read our comment policy before posting your viewpoints