OPEC is reportedly considering a 4 percent output cut as it debates the implementation of a production agreement.

Sources told Reuters that OPEC members are planning to debate a production agreement that would cut the group’s output by between 4 to 4.5 percent.

A cut of that size would trim the group’s total output by about 1.2 million barrels per day, according to an analysis conducted by Reuters.

Sources also told Reuters that representatives from Iran, Iraq and Indonesia have expressed reservations about signing onto the production agreement.

OPEC members agreed at a meeting earlier this year to cut its output range to between 32.5 million to 33 million barrels per day, down from a record output of 33.8 million bpd in October.

The group has not yet disclosed how those production cuts will be allocated.

Sources told Reuters on Tuesday that Iran has been asked to reduce production by 4.5 percent from its current level of about 4 million bpd.

Iran has repeatedly said it would not trim its production below 4 million bpd as it focuses on boosting output now that Western sanctions have been lifted.

Iran’s refusal to cut production led to the failure of two proposed production agreements earlier this year.

Russian president Vladimir Putin said this month that his country is prepared to freeze its output level in an effort to boost global crude prices.

During a press conference attended by Reuters, Putin added that he believes there is a “high probability” that OPEC will finalize a production deal.

The International Energy Agency said this month that the global oil market should move from “surplus to deficit very quickly in 2017” if OPEC implements its production plan.

However, the agency added that the current crude glut would still take some time to deplete even if OPEC secures a deal.

OPEC members will meet in Vienna on November 30.


Leave a Reply