05.10.2022

3 OPEC members block production increase

Iran said Venezuela and Iraq will join in blocking a proposal to increase production at the OPEC + meeting this week. It is reported by Bloomberg.

The world’s largest oil producers will meet in Vienna June 22-23, where they will discuss whether to increase production or maintain production restrictions.

The upcoming meeting of OPEC members and oil producers outside the cartel may become one of the most difficult in recent years due to the different interests and requirements of the participants. Russian Energy Minister Alexander Novak said Russia and Saudi Arabia agreed to an indefinite extension of the OPEC + deal.

“The three OPEC founders intend to stop this,” said Iranian representative at OPEC Hussein Kazempur Ardebili in an interview with Bloomberg on Sunday. – If Saudi Arabia and Russia want to increase production, this will require unanimity. If these two countries want to act alone, this will violate the cooperation agreement. ”

While Saudi Arabia and Russia have reserve capacities, it will be difficult for many OPEC countries, including Iran and Venezuela, to increase production, even if their quotas are increased.

OPEC and its allies could consider increasing production by 1.5 million barrels per day (b / s), the Russian energy minister said on Thursday. This would be enough to compensate for the loss of supplies from Venezuela and Iran predicted by the International Energy Agency (IEA). Saudi Arabia is discussing various scenarios that will increase production by 0.5-1 million b / s, said Bloomberg sources familiar with the situation.

Meanwhile, US President Donald Trump continues to criticize OPEC in his Twitter account. Concerned about the impact of gas prices on mid-term elections, the Trump administration is aggressively lobbying for increased production.

“We urge our brothers in OPEC and Russia not to indulge Trump, who is applying sanctions against the two founders of OPEC, as well as Russia,” said Kazempur Ardebili. “There is a sufficient supply on the market, and OPEC must adhere to its decision to limit production until the end of the year.”

According to Vesti.Ekonomika, the IEA said last week that oil demand would grow steadily in 2019 due to the sustainability of the global economy, but the world could face a large oil shortage by the end of next year.

Iran and Venezuela may lose almost 30% of their oil production next year, which will require additional supplies from the rest of OPEC members, the agency warned.

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