OPEC+ unlikely to reach a consensus on production cuts, says Iran’s OPEC governor
Bukola Odufade is Businessamlive Reporter.
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Organisation of Petroleum Exporting Countries (OPEC) and its allies are unlikely to extend their production cut agreement at this week’s meeting, Hossein Kazempour Ardebili, Iran’s OPEC governor, said on Tuesday, adding that he expects some countries, to pull out of the agreement in protest over behaviour that had sharply decreased oil prices.
He noted that some members are upset over recent output increases by Saudi Arabia and Russia, which contributed to the drop in oil prices.
“The cooperation agreement is unlikely to be renewed,” he said in comments published by Iran’s oil ministry. “At least some member states will not join it, in which case any renewal will be out of the question.”
In fact, some producers without the capacity to pump more may leave OPEC altogether, he said. Qatar on Monday surprised OPEC by announcing it was withdrawing from the organisation from January 2019.
“Some producers have limited production capacity. Therefore, they may be faced with lower demand for production, while on the other hand, they lack any spare capacity for increased production, if need be,” he said in comments published by Iran’s oil ministry. “That strengthens the possibility of exit by minor member states. That is not impossible.”
OPEC+ will meet Thursday in Vienna to discuss output strategy, with Saudi Arabia, the UAE and other members pushing for a cut that they say will be needed to avoid a supply glut. Officials have cited market forecasts showing a surplus of 1 million barrels per day to 1.4 million barrels per day in the months ahead.