The Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers are seeking a compromise as Saudi Arabia and Russia are pushing the oil cartel and its allies to boost oil output despite opposition from several members of the producer group including Iran.

Moscow is eager to benefit from the high oil prices and, along with Riyadh, is arguing that raising production will meet growing demand and cover supply shortfalls in Libya and Venezuela.

“I think it’s fair to say that Russia can increase production to bring it back where it was in October 2016. Basically Russia’s under the OPEC-plus deal, which was 300,000 barrels per day, so it can bring back this much to the market within a few months,” Alexei Kokin, a senior oil and gas analyst at UralSib Financial Corp in Moscow, told New Europe by phone on June 22.

In late 2016, OPEC and non-OPEC producers, including Russia, decided to cut 1.8 million barrels of production to revive the oil market and reduce the oil glut.

“The idea behind this is to make up for lost revenues while demand is strong, while there is a shortage in the market,” Kokin said. “There is a risk that this shortage will increase by the end of the year because of Venezuelan and Iranian sanctions. So the point here is to basically sell more oil when the price is strong and to prevent a price hike because a spike for others would increase production,” he said, also referring to shale producers.

On June 21, the Joint Ministerial Monitoring Committee, which includes Russia and Saudi Arabia, reportedly reached a preliminary agreement to boost production by 1 million barrels a day, but Tehran has refused to go along.

Iranian Oil Minister Bijan Namdar Zanganeh walked out of the meeting and predicted OPEC won’t convince him to back an increase, Bloomberg reported. Tehran had increased oil production and was seeking fresh investment after an international accord over Iran’s nuclear programme but fresh US sanctions imposed after President Donald J. Trump unilaterally withdrew from the international accord, could significantly curb the country’s oil exports.

CNBC quoted the Iranian Oil Minister as saying it was Trump who had created difficulty for the oil market by imposing sanctions against Iran and Venezuela yet he now expects OPEC to deal with the consequences by pumping more.

“President Trump thinks that [he] can order OPEC and instruct to OPEC to do something… It’s not fair, I think, and OPEC is not a part of the Department of Energy of the United States,” the news television channel quoted Zanganeh as saying.

On June 22, oil prices rose more than 1%. Benchmark Brent crude was up $1.05 a barrel at $74.10 by 0925 GMT. US light crude was 80 cents higher at $66.34, according to Reuters.

Falling production in Venezuela and Libya, as well as geopolitical tensions, especially fresh sanctions against Iran, have all increased market worries of a supply shortage. Traders are also concerned by trade dispute between the US and its trading partners, which could hit US crude oil exports to China.

UAE Minister of Energy and Industry Suhail Al Mazrouei, who holds the OPEC presidency this year, told New Europe in May during a rare and exclusive interview at GLOBSEC 2018 that OPEC and non-OPEC producers are striving for a balanced market with a fair and sustainable level of inventories for consumers.

“What I can assure you is that we’re committed to achieve that market stability and this group is resilient to many changes in the past and I think it will continue carrying out its duties to hopefully achieve the market balance even if we have a geopolitical situation where we need to do something about it,” Mazrouei said.

“Sometimes geopolitics pushed the price for a week or two, or even a month. But that’s not sustainable. It will go and disappear when that effect disappears,” he said. “We’re not ignoring the market and we’re not benefiting from having this type of fluctuation,” Mazrouei said.

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