Iran signals compromise for modest rise in OPEC oil output

High oil prices hurting fiscal balance, says Pradhan

Iran is particularly vocal about its objections as it braces for the impact of fresh USA sanctions on its oil exports after President Donald Trump quit the worldwide nuclear agreement.

Unlike Iran, both Russian Federation and Saudi Arabia now have ample room to increase production, analysts say.

Reuters reported that the reinstitution of us sanctions in November could cut Iran's oil output of almost 4 million barrels a day by a third.

Oil prices rose in early Asian trading on Wednesday, supported by a drop in USA commercial crude inventories reported by the American Petroleum Institute (API).

Saudi Energy Minister Khalid al-Falih said the world could face a supply deficit of up to 1.8 million barrells a day in the second half of 2018.

However, Riyadh, which cheered Washington's exit from the nuclear pact, is under pressure from Trump to boost output in order to lower oil prices ahead of November's midterm elections.

A production increase on Friday would undo a cut agreed on in late 2016 that has since then helped push up the price of oil by nearly 50 percent.

Benchmark Brent crude LCOc1 was unchanged at $75.08 a barrel by 1037 GMT.




"We expect from Opec and its members a commitment to step in (and) more than fill the gap to ensure sustainable prices", Indian oil minister Dharmendra Pradhan said at a seminar in Vienna. "Hope OPEC will increase output substantially".

By contrast, Saudi Arabia, the cartel's biggest producer and a fierce regional rival to Iran, could have the room to increase output more — and make more money — to make up for the shortfall in countries like Iran. Iran's production is also likely to fall in the second half of 2018 due to new U.S. sanctions.

Falih said the exact mechanics of any increase would be decided among all OPEC members on Friday.

Iran, OPEC's third-largest producer, had demanded OPEC reject calls from Trump for an increase in oil supply, arguing that he had contributed to a recent rise in prices by imposing sanctions on Iran and fellow member Venezuela. Iran is usually not part of the committee, which includes Russia, Saudi Arabia, the UAE, Oman, Kuwait, Algeria and Venezuela.

As tensions mounted, the Iranian and Saudi ministers huddled for bilateral talks on Friday morning, holding up the start of the closely watched OPEC meeting.

Opec inched closer to an agreement that would allow an oil-supply increase after positive talks between Saudi Arabia and Iran. She said OPEC ministers had acted as "their own worst enemies" by warning this week of a potential shortage of around 2 million barrels per day in the second half of 2018.

The 14-nation OPEC and its 10 non-member partner nations, known as OPEC+, are in the midst of an agreement that runs through the end of the year, under which they have trimmed production by 1.8 million barrels per day.

"We think this will go a long way in keeping the market from tightening", Falih told reporters.

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