Opec closes in on output deal as Iran gets new offer

Opec is moving closer toward finalising, this month, its first deal since 2008 to limit oil output, with most members prepared to offer Iran significant flexibility on production volumes, ministers and sources said yesterday.

Iran has been the main stumbling block for such a deal because Tehran wants exemptions as it tries to regain oil market share after the easing of Western sanctions in January.

Iran’s rival Saudi Arabia, the biggest producer in OPEC, has argued Iran’s output has peaked and it should not be granted major concessions.

Yesterday, several OPEC oil ministers - including Saudi Arabia’s Khalid al-Falih - met in Doha on the sidelines of a gas forum. Iranian officials attended the gathering although minister Bijan Zanganeh did not come.

At the meeting, OPEC member countries proposed Iran cap its oil output at 3.92 million barrels per day (bpd). Iran has previously said it would accept a freeze at between 4.0 and 4.2 million bpd.

Gulf OPEC sources have said they wanted Iran to cap output at around 3.6-3.7 million bpd - the volume it is currently producing. Iran’s OPEC governor, who attended yesterday’s talks, said he was optimistic that the producer group would reach a deal when it gathers formally in Vienna on November 30.

If OPEC reaches a deal then, it may also draw support from non-OPEC members including Russia, which promised to co-operate but so far has refrained from any firm commitment.

A stronger dollar weighed down oil prices yesterday, but Brent crude was still headed for its first weekly gain in five on hopes that OPEC might agree a deal.


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