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Saudi-Russian Optimism over OPEC Oil Output Deal | ASHARQ AL-AWSAT English Archive 2005 -2017
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The logo of the Organization of the Petroleum Exporting Countries (OPEC). Reuters

Doha-Russia’s energy minister said Friday he was “quite optimistic” the OPEC oil cartel will reach an agreement later this month on a planned output cut to shore up prices.

Alexander Novak was speaking after informal talks in Doha with some but not all of his OPEC counterparts ahead of the cartel’s meeting in Vienna on November 30.

The cartel’s 14 members have been at odds over the details of the production cut agreed in Algiers in September, which is supposed to lead to a wider agreement with non-OPEC producers including Russia.

Iraq has asked for an exemption, saying it needs the income to fund its war against ISIS.

Asked whether he thought Iraq would agree to a freeze or cut at the Vienna meeting, Novak said: “I would say that I am quite optimistic at this point.

“Today’s discussions… do instill optimism in me.

“And I believe that the consultations of technical experts, which are going to be held soon, and other consultations ahead of the 30th November meeting… would result in an agreement.”

He also told reporters that Russia was willing to limit production to “certain levels”.

“We believe that demand will continue to grow.

“Even today we have discussed numbers that demand will grow by 1.1, 1.2 million bpd (barrels per day) next year.
“If we jointly with OPEC can stabilize production and not add to supply then, yes, we believe this will be a very significant step of rebalancing the market.”

Saudi Oil Minister Khalid Al-Falih also attended Friday’s meeting but made no comment as he left and instead gave a thumbs-up sign to reporters.

Al-Falih, speaking to Al-Arabiya TV network on Thursday, said he was “still optimistic that the consensus reached in Algiers to put a ceiling to production will be implemented by adopting ceilings for countries.”

OPEC ministers agreed in Algiers to reduce production to 32.5-33 million bpd from the 33.47 million pumped in August, the first cut in eight years.

Algeria’s energy minister Noureddine Bouterfa said discussions on Friday had been “good” and that “maybe” 32.5 million bdp would be the production target spoken about in Vienna.

Meanwhile, ministers and sources told Reuters on Friday that OPEC is moving closer towards finalizing this month its first deal since 2008 to limit oil output, with most members prepared to offer Iran significant flexibility on production volumes.

Iran has been the main stumbling block for such a deal because Tehran wants exemptions as it tries to regain oil market share after the easing of Western sanctions in January.

But Saudi Arabia has argued Iran’s output has peaked and it should not be granted major concessions.

On Friday, several OPEC oil ministers met in Doha on the sidelines of a gas forum. Iranian officials attended the gathering although minister Bijan Zanganeh did not come.