Saudi Arbia is prepared to do whatever it takes to avoid global oil supply shortages
Oil ministers from OPEC and its allies have arrived in Vienna for what promises to be one of the cartel’s most contentious meetings in years as Iran opposes proposals to boost production.
Saudis confident; Ecuador predicts supply boost (1.15pm CET)
“Of course we will have an agreement” at the meeting on Friday, Saudi Energy Minister Khalid Al-Falih tells reporters in his first comments since arriving in Vienna.
Ecuador also expects a deal allowing more oil to flow onto the market, but something smaller than the 1.5 million barrel-a-day Russia has proposed.
“We think some of the restrictions should be lifted, but consensus will be needed to discern at what level this is done,” said Ecuador’s Minister of Hydrocarbons Carlos Perez. “Probably it will end up being somewhere lower, at around 600,000 barrels a day.”
Iran sets strict limits on additional supply (12.49pm CET)
One way of “resolving the situation” would be for all participants in the oil-production cuts to stop exceeding their targets, meaning countries that have been making additional curbs would restore output, Iranian Oil Minister Bijan Namdar Zanganeh told reporters in Vienna.
A committee concluded on Tuesday that the 24 nations that from the OPEC+ group exceeded their targeted reduction by 47 per cent in May. That’s equivalent to an extra 800,000 barrels a day of cuts.
However, Iran’s OPEC Governor Hossein Kazempour Ardebili told reporters his country would only accept a return to 100 per cent compliance for each country on an individual basis. No nation should be allowed to boost output in order to take market share away from another member.
This position would drastically limit the size of any output boost. Data from the International Energy Agency indicate that Saudi Arabia would be able to pump an extra 30,000 barrels a day above May levels, or Qatar could add 10,000. But the Iranian compromise would do nothing to roll back the additional 610,000 barrel-a-day supply reduction resulting from the collapse in Venezuela’s oil industry, nor the extra 170,000 barrel-a-day decline from Mexico’s aging fields.
Saudis will do whatever it takes to avoid shortage (12.12pm CET)
Prince Abdulaziz bin Salman Al Saud says the kingdom is prepared to do whatever it takes to avoid global oil supply shortages.
The prince, who is Saudi minister of state for energy affairs, was speaking at the OPEC seminar in Vienna, ahead of what is likely to be a difficult meeting. He was reading a speech from Energy Minister Khalid Al-Falih, who was unable to attend the event. The prince said that Saudi Arabia and is committed to balancing the market and OPEC is seeking to expand cooperation beyond the 24 producers participating in the current oil-cuts deal.
While market fundamentals are healthy, large crude-consuming countries are anxious about a looming supply shortfall because of underinvestment in new oil and gas projects, he said.