Iran is assessing a proposal for a collective Opec output cut, but hasn’t announced any commitment to reduce its own production as the group tries to end disagreements about how to share the burden of supply cuts ahead of a meeting in Vienna.
Algerian Energy Minister Noureddine Boutarfa presented a proposal for an Opec cut of 1.1mn bpd during a meeting with his Iranian counterpart Bijan Namdar Zanganeh in Tehran yesterday, according to an Iranian oil ministry official. Opec is also proposing a 600,000 bpd output cut by non-Opec producers, the official said.
The two ministers discussed each country’s share of the proposed cut and Zanganeh said Iran will assess the proposal and discuss it further at the Vienna meeting on November 30, the official said. Zanganeh, who didn’t comment on Iran’s position about cutting its own production, expressed optimism about the Opec meeting next week, the official said.
Boutarfa, the architect of the Algiers crude supply agreement in September, is on a shuttle diplomacy mission to try to resolve differences blocking the Opec deal, particularly the question of whether Iran and Iraq are willing to cut production. He is also due to meet with the Iraqi oil minister this week.
In a surprise move, Saudi Arabia pulled out of talks planned for tomorrow with non-Opec producers including Russia because it wants to secure an Opec deal first. The meeting was later cancelled and Opec members called instead for internal talks to try to resolve their own differences ahead of the ministerial meeting on November 30.
The setback suggests that Saudi Arabia remains split from two biggest Middle Eastern members at the Organization of Petroleum Exporting Countries. Iran insists it should be allowed to restore output to pre-sanctions levels, while it remains unclear if Iraq is still disputing the Opec supply estimates that would provide the basis for any cuts.