LONDON: Saudi Arabia and its Gulf Arab allies are likely to try to avoid confrontation with Iran and recommend leaving OPEC's oil output target unchanged when producer countries gather next month.
Delegates to the meeting on June 14 in Vienna say oil ministers probably won't touch output policy.
They hope proceedings will be swift and low-key, avoiding a repeat of the bust-up of a year ago when Iran and others opposed a Saudi-led plan to raise production.
The score was settled in December when the Organization of the Petroleum Exporting Countries raised its supply target to 30 million barrels per day (bpd). Production by the 12-member group is now running about 1.6 million bpd above that target.
"A roll-over would be a decision that everyone will agree on," said a Gulf OPEC delegate. "It's the least troublesome road to take and will keep OPEC at peace."
It remains to be seen whether or not OPEC can keep a lid on the political tensions caused by Western sanctions against Iran that have seen Tehran's oil output slump.
Saudi Arabia has taken up the slack, pumping more to keep oil prices in check. Tehran is quietly seething over the rise in Saudi output to over 10 million bpd, the highest in 30 years, that is helping to cushion the impact of US and European measures against Iran's nuclear programme.
Iran has seen its own output sink to just over 3 million bpd, the lowest in two decades, and expectations are that production will fall further when a European Union oil embargo takes full effect in July.
"Iran is not happy about the high level of OPEC production - especially from Saudi Arabia," said an Iranian oil source.
"But this is likely to be discussed by oil ministers behind closed doors - not in public." Saudi is filling storage tanks at home and abroad and supplying the newly-expanded, Aramco-partnered Motiva refinery in Port Arthur, Texas.
Despite lower Iranian output, overall OPEC supply is at its highest since 2008. An effort to officially recognise these higher rates by raising OPEC's overall supply target would antagonise
Tehran, which would see it as a move by Saudi Arabia to grab market share. "There is no excuse for making a political decision," said the Iranian source.
indiatimes.com
Delegates to the meeting on June 14 in Vienna say oil ministers probably won't touch output policy.
They hope proceedings will be swift and low-key, avoiding a repeat of the bust-up of a year ago when Iran and others opposed a Saudi-led plan to raise production.
The score was settled in December when the Organization of the Petroleum Exporting Countries raised its supply target to 30 million barrels per day (bpd). Production by the 12-member group is now running about 1.6 million bpd above that target.
"A roll-over would be a decision that everyone will agree on," said a Gulf OPEC delegate. "It's the least troublesome road to take and will keep OPEC at peace."
It remains to be seen whether or not OPEC can keep a lid on the political tensions caused by Western sanctions against Iran that have seen Tehran's oil output slump.
Saudi Arabia has taken up the slack, pumping more to keep oil prices in check. Tehran is quietly seething over the rise in Saudi output to over 10 million bpd, the highest in 30 years, that is helping to cushion the impact of US and European measures against Iran's nuclear programme.
Iran has seen its own output sink to just over 3 million bpd, the lowest in two decades, and expectations are that production will fall further when a European Union oil embargo takes full effect in July.
"Iran is not happy about the high level of OPEC production - especially from Saudi Arabia," said an Iranian oil source.
"But this is likely to be discussed by oil ministers behind closed doors - not in public." Saudi is filling storage tanks at home and abroad and supplying the newly-expanded, Aramco-partnered Motiva refinery in Port Arthur, Texas.
Despite lower Iranian output, overall OPEC supply is at its highest since 2008. An effort to officially recognise these higher rates by raising OPEC's overall supply target would antagonise
Tehran, which would see it as a move by Saudi Arabia to grab market share. "There is no excuse for making a political decision," said the Iranian source.
indiatimes.com
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