Vienna (AFP) – Saudi Arabia’s energy minister on Wednesday said he was convinced OPEC members would “do the right thing” and agree to ease an oil production cap this week despite strong resistance from archfoe Iran.
“I’m confident that at the end of the day reason will prevail and we’ll be doing the right thing. So stay tuned,” Khalid al-Falih told reporters at an OPEC seminar in Vienna.
The comments came after Falih huddled for hours with his OPEC counterparts on the sidelines of the conference, two days ahead of a crucial meeting on the fate of an 18-month-old supply-cut pact between OPEC and non-OPEC allies that has lifted prices to around $70 a barrel.
Saudi Arabia and non-member Russia are now pushing to open the spigots again but Iran, bracing for the impact of renewed US sanctions on its oil exports, wants the OPEC+ group to stick to the agreed cuts of 1.8 million barrels a day.
Falih said every minister he had met with “agrees that it’s time for us to change course”, noting that global oil demand is expected to climb in the coming months.
Riyadh is also under pressure from US President Donald Trump to boost output in order to lower oil prices before US voters head to the polls for November’s midterm elections.
Taking to the stage at the same Vienna seminar, Iranian Oil Minister Bijan Namdar Zanganeh reiterated his country’s resistance to increasing output and accused Trump of trying to politicise OPEC.
“The real responsibility for the current oil price hike lies with the US president himself,” Zanganeh told the audience.
– ‘Stormy weather’ –
Trump has in recent months repeatedly blamed OPEC for a spike in oil prices, but Zanganeh said it was US sanctions on Iran and Venezuela that had fuelled fears of a supply crunch and put pressure on prices.
Iran is facing a fresh round of penalties following Trump’s decision to quit the international nuclear pact, and is wary of any attempt by regional rival Riyadh to offset the losses and appease Trump.
Saudi’s Falih acknowledged the tensions, saying: “Oil has always been influenced by politics.”
But he insisted that any decision made “will be based on fundamentals”.
Observers believe a possible face-saving compromise could be clinched if members agree to stop over-complying with the current pact, and simply stick to the agreed cuts — which would bring several hundred thousand more barrels to the market each day.
The 14 nations in the OPEC cartel are set to discuss changing output policy in the Austrian capital on Friday, with 10 non-member partner countries including Russia joining the talks Saturday.
OPEC secretary general Mohammad Barkindo said he was confident an agreement would be found.
“Despite the rising political tensions, as well as the tensions on the international trade side, we will be able to navigate this stormy weather,” he told reporters.