Global oil consumption expected to hit 100mbpd in 2019 Press "Enter" to skip to content

Global oil consumption expected to hit 100mbpd in 2019

Novak said that if a decision were taken this week to raise output, OPEC and its allies could meet again in September to review the impact and fine-tune production policy.

The energy ministers of Kuwait, Angola and the United Arab Emirates declined to comment on Tuesday when arriving in Vienna, where the 14-member OPEC is headquartered.

On Monday, Ecuador’s oil minister Carlos Perez predicted a difficult OPEC meeting.

“There are other countries that do not want to reduce the cuts … It’s going to be a difficult … a tough meeting,” Perez said in the Austrian capital.

OPEC’s second- and third-largest producers, Iraq and Iran, have said they would oppose output increases on the grounds that such moves would breach previous agreements to maintain cuts until 2019.

Both countries would struggle to increase output. Iran faces renewed U.S. sanctions that will impact its oil industry and Iraq has production constraints.

Two OPEC sources told Reuters that even Saudi Arabia’s Gulf allies Kuwait and Oman were against big, immediate increases in output.

One OPEC source said the Saudi-Russian proposal of a 1.5-million-bpd increase was “just a tactic” aimed at persuading fellow members to compromise on a smaller rise of around 0.5-0.7 million bpd.

Saudi Arabia and its Gulf allies have the capacity to raise output. Russia has also said that limiting supply for too long could encourage unacceptably high output growth from the United States, which is not part of the production agreement.

On Tuesday, the head of Russia’s second-largest oil firm Lukoil, Vagit Alekperov, said global production cuts should be halved and that Lukoil could restore its oil output levels within two to three months.

Commerzbank commodities analyst Carsten Fritsch said that given big differences in the positions of OPEC members, the Friday meeting was likely to be tough.

“Unanimity is needed for any OPEC decision. This recalls the June 2011 meeting, when OPEC was unable to agree on an increase in production to compensate for the outages … in Libya,” Fritsch said.

“That meeting ended without any joint declaration. The then Saudi Oil Minister Ali al-Naimi described it as the worst OPEC meeting of all time.”

Adding to the tensions, Iran and Venezuela continued to insist that OPEC on Friday debate U.S. sanctions against the two countries, but the organization’s secretariat has rejected their requests, according to letters seen by Reuters. (Reuters/NAN)

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