Despite Iran’s statements about plans to veto proposals to increase current oil extraction quotas, the remaining OPEC+ members allow for the possibility of easing the terms of the agreement with an increase in oil production by 600 thousand barrels per day
Representatives of the Organization of Petroleum Exporters (OPEC) member countries and a number of states that participated in the deal on limiting oil production (OPEC+) are discussing a compromise solution to mitigate the terms of the agreement, Bloomberg reports citing sources familiar with the negotiations. According to the project they are discussing, OPEC+ in the next few months could increase oil production in the range from 300 thousand barrels. up to 600 thousand barrels per day.
On June 16, Russian Energy Minister Aleksandr Novak voiced plans to offer OPEC+ to temporarily raise oil production by
1.5 million barrels. He said Moscow was going to put forward such an initiative together with Riyadh. “Now, in the third quarter, there will be a growth in sprouts, so such proposals are really advisable,” the minister said, emphasizing that in this case it is only about increasing oil production in the third quarter of 2018.
Commenting on this information, the representative of Tehran at OPEC, Hussein Kazempur Ardabili said that Iran, which along with Iraq and Venezuela is one of the founders of the Organization of the Petroleum Exporting Countries, is going to veto the offer of Russia and Saudi Arabia.
Despite this, other countries – members of the agreement and non-contracting states, as noted by Bloomberg sources, are optimistic about the possible softening of quotas. If the increase in oil production is agreed, it will be less than Russia and Saudi Arabia are planning, the agency said.
Also, OPEC members, according to Bloomberg sources, are working to establish cooperation on a regular basis between the cartel, Russia and other oil producers (the OPEC + group, which currently consists of 24 countries). This, as the agency stresses, “will be a major diplomatic breakthrough for Riyadh and Moscow after two years of cooperation with the cartel in the oil policy.” The issue of possible easing of the quota within the framework of the OPEC + agreement, Bloomberg reminds, the parties will discuss at a meeting in Vienna on June 22-23.
In the same place in 2016, the OPEC countries and a number of other non-member states (OPEC+) agreed for the first time to cut their oil production by a total of 1.8 million barrels per day from the level of October 2016. Since then, this agreement has already been extended twice, the last time the parties agreed to extend it until the end of 2018.