Industry and Energy

Home page

Industry and Energy

OPEC to discuss reduction of daily output by 1M barrels

28 September 2016 10:20 (UTC +04:00)

Baku - APA-Economics. OPEC members will today discuss a proposal that would cut almost 1 million barrels a day of global production over one year, the Wall Street Journal reported.

Under the proposal, Saudi Arabia would carry out the bulk of the reduction, cutting 400,000 barrels a day from record highs of almost 10.6 million barrels a day in August.

In return, Iran would have to agree to freeze at 3.7 million barrels a day—slightly above its August levels.

Scenario was meant to start discussions that could pave the way for reaching an agreement in November.

OPEC members won’t reach a deal to curb output during talks this week, but could agree to cut production when they meet in November, Saudi Arabia’s energy minister said Tuesday.

The proposal to reduce output, if eventually adopted, would represent the 14-nation cartel’s first concrete action to prop up the market since oil prices crashed beginning in 2014. It would also represent a departure for Saudi Arabia, which has opened the spigots wide during the market slump in a fierce competition for customers with U.S. oil producers and others.

Iran’s reaction to the Saudi-backed plan isn’t yet clear, but the proposal wouldn’t allow Iran to carry out plans to increase its production to over 4 million barrels a day.

Earlier Tuesday afternoon, Iranian Oil Minister Bijan Zanganeh said he hadn’t received any official proposal from Saudi Arabia, and his country has no plans to limit its oil production. Iran is trying to ramp its production back up now that Western sanctions that crippled its oil industry have ended.