Iran says OPEC won't take direction from Trump

High oil prices hurting fiscal balance, says Pradhan

The price of oil has jumped 55% since OPEC agreed to cut production by 1.8 million bpd.

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.

Opec in theory needs the agreement of all members to clinch a deal but has in the past agreed production pacts without Iran, which has criticised the idea of raising supply as it faces USA sanctions.

But regional rival Iran has bristled at the thought of lifting the output ceiling at a time when its oil industry is facing renewed sanctions over US President Donald Trump's decision to quit the global nuclear deal with Tehran.

Ahead of Friday's meeting, OPEC's largest producer, Saudi Arabia, was seen to be open to higher production but Iran had been hesitant.

Iran signalled on Wednesday it could compromise on a small increase in OPEC oil output when the group meets this week, as Saudi Arabia scrambled to convince fellow members of the need for a larger rise in production.

"What strikes me most is the great alignment, the very strong alignment between the interests of producers and consumers and many people underestimate how much alignment of interests there is between producers and consumers of petroleum", he said in his speech.

Russian Federation has proposed Opec and non-Opec raise output by 1.5 million barrels per day (bpd), effectively wiping out existing production cuts of 1.8 million bpd that have helped rebalance the market in the past 18 months and lifted oil to $75 per barrel.

Once known for rampant cheating on agreed oil output targets, Opec has been over-delivering on a pact in place since January 2017, cutting around one and a half times the promised amount.

Iran's Oil Minister Bijan Namdar Zanganeh walked out that meeting, telling reporters he did not think an agreement could be reached.

Reuters reported Saudi Arabian Energy Minister Khalid al-Falih telling reporters in Vienna that the oil market had now rebalanced and his aim was to prevent a shortage of crude in future that could squeeze the market.

In an historic agreement in late 2016 the OPEC+ group of 24 nations made a decision to cut 1.8 million barrels of production to revive the oil market from its biggest slump in a generation. The measure has helped rebalance the market in the past 18 months and lifted oil to around $74 per barrel from as low as $27 in 2016.

Venezuela, in the throes of an economic crisis, is also opposed to easing the cartel's output curbs, as are several other countries, including Iraq and Nigeria, who would struggle to immediately increase production. Consecutive increase in inventory is not good for a stable market price so also is a sudden fall in inventory due to higher oil price. "OPEC is not part of the Department of Energy of the United States".

That would effectively mean a modest boost from producers such as Saudi Arabia that has been cutting more deeply than planned despite production outages in Venezuela and Libya.

Zangeneh also said on Friday OPEC would change the structure of the current deal, but did not elaborate.

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