Economy

OPEC, Russia move closer to cutting oil output

OPEC, Russia move closer to cutting oil output

The possible deal will come after some OPEC and non-OPEC members motivated by an urge to get a better market share sharply increased their oil production, which led to a $30 drop in oil prices from their highest point.

If the 20 or so OPEC members and other nations at the Vienna talks - which account for more than half of the world's oil - continue to pump at current record levels, they risk seeing prices continue to tumble.

"We have taken over 1 million bpd off Iran's export list and many more barrels will be coming off very soon", the diplomat said at a briefing.

The extent to which the market is well supplied next year will depend in large part on whether talks between OPEC and its allies, in which Al-Falih will play a decisive role, result in an agreement to cut production, perhaps as much as 1 million barrels a day.

Saudi Arabia has been calling steep cuts in oil output and was expected to raise those demands during the meeting, but pressure from the USA may convince Saudi leaders to take a softer tone.

OPEC members will meet on Thursday and hold talks with allies such as Russian Federation on Friday.

Russia, Saudi Arabia and the United States have been vying for the position of top crude producer in recent years.

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Oil prices have fallen by nearly a third since October to around $62 per barrel after Saudi Arabia raised production to make up for the drop in Iranian exports.

Oil prices have fallen by nearly a third since October to around $62 per barrel after Saudi Arabia raised production to make up for the drop in Iranian exports.

However, when oil producers realized the sanctions fell far short of what had been expected, fears of oversupply followed.

During Thursday's meeting, OPEC leaders are expected to discuss how to stabilize crude oil production after US prices plunged by 22-percent in November - making it the worst month since the financial crisis in 2008. Trump wrote in a tweet on Wednesday. Trump has backed Saudi Crown Prince Mohammed bin Salman despite calls from many United States politicians to impose stiff sanctions on Riyadh.

On the eve of the OPEC meeting, the senior US official overseeing sanctions on Iran made a rare foray into the group's home turf, for a discreet Viennese breakfast with the cartel's most powerful member. So he wants low prices now.

"Bob McNally, president of USA -based Rapidan Energy Group, said OPEC was stuck between a rock and a hard place given pressure from Trump on one hand and the need for higher revenues on the other". "It won't be called a cut but will effectively mean a cut, which will also be hard to quantify", McNally said.