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Saudis offer oil cut for Opec deal if Iran freezes output: Sources

First source did not say by how much Riyadh would cut if Iran agreed to freeze at 3.6 million bpd

 

Arabia has offered to reduce oil production if rival agrees to cap its own output this year, in a major compromise ahead of talks in next week, three sources familiar with the discussions told Reuters.

The offer, which has yet to be accepted or rejected by Tehran, was made this month, the sources told Reuters on condition of anonymity.

is ready to cut output to levels seen early this year in exchange for freezing production at the current level, which is 3.6 million barrels per day (bpd), the sources said.

"They (the Saudis) are ready for a cut but has to agree to freeze," one source said.

Two more sources confirmed the offer was presented to Tehran.

The first source did not say by how much would cut if agreed to freeze at 3.6 million bpd, which has been the (Opec) nation's output for the past three months.

Riyadh's production has spiked since June due to summer demand, reaching a record high in July of 10.67 million bpd and edging down to 10.63 million bpd in August.

From January to May, Arabia produced around 10.2 million bpd.

Two sources said Arabia's Gulf allies, the United Arab Emirates, and were expected to contribute to any reduction if an agreement were reached.

Arabia, by far the largest producer in the Opec, will shoulder the biggest cut, the sources said.

The proposal can be seen as a shift by Riyadh, which orchestrated the current policy in 2014 by refusing to cut output alone to support prices and chose to defend market share against rivals, particularly high-cost producers.

A fall in oil prices to $30-$50 per barrel from levels as high as $115 seen in June 2014 led to a boost in global oil demand and a decline in high-cost supplies such as those from the United States.

But the strategy caused a rift in the Opec, whose poorer members have faced a budget crisis and unrest. and its Gulf allies also had to tighten their belts after a decade of generous public spending.

As the pain of cheap oil grew and pressures on finances increased, and signalled they were willing to show more flexibility to prop up prices.

However, the first attempt at a global production pact collapsed in April when insisted participate. has said it will not join any such agreement until it regains market share and boosts output to pre-sanctions levels of around 4 million bpd.

members will meet on the sidelines of the Energy Forum, which groups producers and consumers, in from September 26-28. Non-producer is also attending the forum.

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Business Standard

Saudis offer oil cut for Opec deal if Iran freezes output: Sources

First source did not say by how much Riyadh would cut if Iran agreed to freeze at 3.6 million bpd

Reuters  |  DUBAI/LONDON 

Image via Shutterstock
Image via Shutterstock

 

Arabia has offered to reduce oil production if rival agrees to cap its own output this year, in a major compromise ahead of talks in next week, three sources familiar with the discussions told Reuters.

The offer, which has yet to be accepted or rejected by Tehran, was made this month, the sources told Reuters on condition of anonymity.

is ready to cut output to levels seen early this year in exchange for freezing production at the current level, which is 3.6 million barrels per day (bpd), the sources said.

"They (the Saudis) are ready for a cut but has to agree to freeze," one source said.

Two more sources confirmed the offer was presented to Tehran.

The first source did not say by how much would cut if agreed to freeze at 3.6 million bpd, which has been the (Opec) nation's output for the past three months.

Riyadh's production has spiked since June due to summer demand, reaching a record high in July of 10.67 million bpd and edging down to 10.63 million bpd in August.

From January to May, Arabia produced around 10.2 million bpd.

Two sources said Arabia's Gulf allies, the United Arab Emirates, and were expected to contribute to any reduction if an agreement were reached.

Arabia, by far the largest producer in the Opec, will shoulder the biggest cut, the sources said.

The proposal can be seen as a shift by Riyadh, which orchestrated the current policy in 2014 by refusing to cut output alone to support prices and chose to defend market share against rivals, particularly high-cost producers.

A fall in oil prices to $30-$50 per barrel from levels as high as $115 seen in June 2014 led to a boost in global oil demand and a decline in high-cost supplies such as those from the United States.

But the strategy caused a rift in the Opec, whose poorer members have faced a budget crisis and unrest. and its Gulf allies also had to tighten their belts after a decade of generous public spending.

As the pain of cheap oil grew and pressures on finances increased, and signalled they were willing to show more flexibility to prop up prices.

However, the first attempt at a global production pact collapsed in April when insisted participate. has said it will not join any such agreement until it regains market share and boosts output to pre-sanctions levels of around 4 million bpd.

members will meet on the sidelines of the Energy Forum, which groups producers and consumers, in from September 26-28. Non-producer is also attending the forum.

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Saudis offer oil cut for Opec deal if Iran freezes output: Sources

First source did not say by how much Riyadh would cut if Iran agreed to freeze at 3.6 million bpd

First source did not say by how much Riyadh would cut if Iran agreed to freeze at 3.6 million bpd

 

Arabia has offered to reduce oil production if rival agrees to cap its own output this year, in a major compromise ahead of talks in next week, three sources familiar with the discussions told Reuters.

The offer, which has yet to be accepted or rejected by Tehran, was made this month, the sources told Reuters on condition of anonymity.

is ready to cut output to levels seen early this year in exchange for freezing production at the current level, which is 3.6 million barrels per day (bpd), the sources said.

"They (the Saudis) are ready for a cut but has to agree to freeze," one source said.

Two more sources confirmed the offer was presented to Tehran.

The first source did not say by how much would cut if agreed to freeze at 3.6 million bpd, which has been the (Opec) nation's output for the past three months.

Riyadh's production has spiked since June due to summer demand, reaching a record high in July of 10.67 million bpd and edging down to 10.63 million bpd in August.

From January to May, Arabia produced around 10.2 million bpd.

Two sources said Arabia's Gulf allies, the United Arab Emirates, and were expected to contribute to any reduction if an agreement were reached.

Arabia, by far the largest producer in the Opec, will shoulder the biggest cut, the sources said.

The proposal can be seen as a shift by Riyadh, which orchestrated the current policy in 2014 by refusing to cut output alone to support prices and chose to defend market share against rivals, particularly high-cost producers.

A fall in oil prices to $30-$50 per barrel from levels as high as $115 seen in June 2014 led to a boost in global oil demand and a decline in high-cost supplies such as those from the United States.

But the strategy caused a rift in the Opec, whose poorer members have faced a budget crisis and unrest. and its Gulf allies also had to tighten their belts after a decade of generous public spending.

As the pain of cheap oil grew and pressures on finances increased, and signalled they were willing to show more flexibility to prop up prices.

However, the first attempt at a global production pact collapsed in April when insisted participate. has said it will not join any such agreement until it regains market share and boosts output to pre-sanctions levels of around 4 million bpd.

members will meet on the sidelines of the Energy Forum, which groups producers and consumers, in from September 26-28. Non-producer is also attending the forum.
image
Business Standard
177 22

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