By Ediri Ejoh with Agency report
There are indications that a major decision to govern the production of the one million barrels per day, mbpd, increase in oil output agreed by the Organization of Petroleum Exporting Countries, OPEC, and non-OPEC members would be taken this week.
According to Reuters, OPEC and non-OPEC technical committee will, this week, discuss proposals for distributing the additional oil-output amongst members, which is seen as a tense topic for the producer group after it decided in June to ease supply curbs.
It stated that “a panel called Joint Technical Committee, will, on Tuesday (today) consider proposals on distributing the agreed output increase of 1 million barrels per day.”
“The talks will look at various mechanisms” to reach the required production level, a source told Reuters.
Reuters stated that if resolved, the talks could lead to an easing of tensions within the OPEC members.
Iran had been against the June decision, which came amid pressure from US President, Donald Trump, to reduce oil prices.
It disclosed that there are four proposals on how to distribute the increase, presented by Iran, Algeria, Russia and Venezuela, one of the sources said, suggesting agreement will not be straightforward.
Reuters stated, “One idea, to share it pro-rata among participating countries, is unlikely to be approved by Russia and Saudi Arabia since it would give them less than the supply boosts of 300,000 and 400,000 bpd that they respectively want.
“OPEC, Russia and other non-members agreed in June to return to 100 percent compliance with oil output cuts that began in January 2017. Months of underproduction in Venezuela and elsewhere had pushed adherence above 160 percent.’’
“The June meeting concluded with a deep disagreement between Saudi Arabia and Iran, long-time rivals in OPEC. Saudi Arabia said the decision implied a reallocation of extra production from countries unable to produce more to those, such as Riyadh that can. Iran, facing a forced cut in its oil exports because of US sanctions, disagreed.”