OPEC sources are optimistic that the cartel would manage to clinch a final deal in Vienna in two weeks’ time, while the organization is in the middle of a last-ditch shuttle diplomacy to bridge the gaps among its member producers and try to reach a consensus over at what production level Iran would be happy with.
OPEC officials are currently working on the details of the deal, and OPEC denies that it is in deadlock, Reuters reported on Wednesday, citing OPEC sources familiar with the talks.
“It is difficult at some points but I don’t see any deadlock,” one source said, as quoted by Reuters.
However, the output at which Iran would be expected to freeze continues to be one of the most difficult issues for OPEC to solve, if it is to reach a deal. Iran wants to freeze its production at 4 million bpd, but some OPEC members want it capping at 3.7 million bpd. But other OPEC producers now appear more flexible on this ‘freeze target’ and Iran could be offered to cap at 3.75 million bpd or higher, according to Reuters sources.
Although it is unlikely that Iran’s 4-million-bpd demand would be satisfied, the ‘3.75 million bpd or higher’ level could mean that Saudi Arabia, the UAE and Iraq may have to cut some more (on top of their own cuts) if OPEC members were to distribute the burden of cuts equally, as the Saudis have suggested—some might say demanded.
The cartel’s High Level Committee is meeting in Vienna on Monday, November 21. Before that official meeting, however, the Saudis are meeting some OPEC members and non-OPEC Russia for informal talks on the sidelines of a gas forum later this week.
Now it turns out that neither the Iranian nor Iraqi oil ministers will attend the informal meetings this week, which could further complicate Saudi Arabia’s push for deal.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.