Saturday 22 September 2018 - 11:55
Story Code : 320277
OPEC, other producers may boost oil output amid anti-Iran sanctions - Reports
Sputnik - OPEC and non-OPEC allies have reportedly agreed to review current oil production as a countermeasure to the lack of Iranian oil caused by the US sanctions.
On Friday, the Organization ofthe Petroleum Exporting Countries (OPEC) reported that inAugust, the organizations countries supplied less oil toworld markets thanthey did inJuly, which eventually led toa rise inthe price ofoil inSeptember to $80 a barrel, three OPEC and non-OPEC sources told Reuters.
There are discussions toincrease production byanother 500,000 barrels per day (bpd). They [OPEC and non-OPEC producers] can increase output when they meet inDecember, the sources said, referring tothe next scheduled OPEC meeting onDecember 3. But if the organization wished toaddress the shortage beforethen, it would have toconvene an extraordinary meeting.
According tothe sources, the Joint-OPEC-non-OPEC Ministerial Monitoring Committee (JMMC) will gather inAlgeria overthe weekend todiscuss possible recommendations tofurther increase oil production.
On Thursday, US President Donald Trump linked American support forMiddle Eastern countries tooil prices and urged OPEC tonail the prices down.
Iran, OPECs third-largest producer, pledged toblock any supply increases, saying that the price jump was caused byTrumps decision toput additional sanctions onIranian oil. Iranian Oil Minister Bijan Namdar Zanganeh said he would personally block any OPEC decision that would harm Irans interests, Bloomberg reported.
Any country that says it can make upfor the shortfall inthe market is siding withthe US, Zanganeh told reporters inTehran onThursday, also noting that he will not attend the JMMC meeting, saying that $80 a barrel is a suitable price and declaring that any decision made bythe JMMC toincrease production would be void and invalid.
Meanwhile, Saudi Arabia, the only oil producer able toadjust its output, will not be able toproduce 12 million barrels per day tocover Iranian oil exports once Washington introduces restrictions, media reported.
The state-run Saudi Arabian Oil Company, known asSaudi Aramco, had been informing its customers its crude would be inshort supply inOctober, the Wall Street Journal reported onFriday, citing Saudi officials.
Moreover, the company would not be able tomeet the demand forcrude inthe long term once Tehran, currently producing around1.9 million barrels per day, wold be be banned fromexporting oil, the outlet added.
Augusts OPEC Monthly Oil Market Report showed that Saudi Arabias output reached 10.44 million barrels per day that month.
"[Producing] 11 million [barrels a day] is already a stretch, even forjust a few months," a Saudi official told the Wall Street Journal.
A senior US official told the outlet that according toWashingtons estimates, Riyadh would not be able toboost its oil production to12 million barrels a day. The outlet also noted fears that the situation might result inoil prices hike toabove $80 per barrel.
Benchmark Brent oil prices fell bymore than $1 afterthe news ofa potential output boost, slipping tobelow $79 a barrel. But Irans stance will be an obstacle toany such boost, asOPEC production decisions require all members toapprove them beforethey can take effect.
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