An Opec and non-Opec technical committee will later this month discuss proposals for sharing out an oil-output increase, sources familiar with the matter said, a tense topic for the producer group after it decided in June to ease supply curbs.
A panel called the Joint Technical Committee will on September 17 consider proposals on distributing the agreed output increase of 1 million barrels per day. The discussion had earlier been planned for next Tuesday.
“The talks will look at various mechanisms” to reach the required production level, a source said. If resolved, the talks could lead to an easing of tensions within Opec.
Iran had been against the June decision, which came amid pressure from President Donald Trump to reduce oil prices. There are four proposals on how to distribute the increase presented by Iran, Algeria, Russia and Venezuela, thus suggesting agreement will not be straightforward.
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, the source said.
Opec, Russia and other non-members agreed in June to return to 100 per cent compliance with oil output cuts that began in January 2017. Months of underproduction in Venezuela and elsewhere had pushed adherence above 160 per cent.
The June meeting concluded with a deep disagreement between Saudi Arabia and Iran, longtime 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.
The proposals will next be presented to ministers attending a monitoring meeting in Algeria on September 23, sources said.
Saudi Arabia does the heavy lifting in oil supplies to US
London: Saudi Arabia has markedly increased oil exports to America, a sign Opec’s leading producer is responding to pressure from US President Donald Trump to cool down the energy market. While the export boost started earlier this year, it accelerated over the past three months after Trump repeatedly — both through private diplomacy and public Twitter harangues — asked Saudis to lift production to keep energy prices in check.
Saudi oil shipments into the US reached a four-week average of one million barrels a day last week for the first time since late 2017, and are up roughly 250,000 barrels a day since late May.
“The Middle East producers are becoming much more aggressive, wanting to bring their barrels back into this market,” Gary Heminger, chief executive of Marathon Petroleum Corp, the second-largest US refiner by distillation capacity, said.
The increase in Saudi exports into the US equates to almost half the overall output increase the kingdom has implemented since late May after Opec and allies, including Russia, agreed in June to boost output.
Saudi oil shipments into the US plunged to a 30-year low in October last year. This prompted talk that America’s freedom from Saudi oil was within reach, even if it was largely the choice of supplier rather than customer.
In late October, the four-week average of US imports of Saudi crude hit a low of 506,000 barrels a day, compared with last week’s four-week average surge to 1,009,000 barrels a day.
Source: Gulf News