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February 9, 2020

‘Iran supports unanimous OPEC output cut plan’

Business

February 9, 2020

DUBAI: Iran supports deeper crude oil cuts by the Organisation of the Petroleum Exporting Countries (OPEC) if a majority of members agreed with it, Oil Minister Bijan Zangeneh was quoted as saying by the Iranian energy news website Shana.

A technical panel, known as the JTC that advises OPEC and its allies led by Russia - a grouping known as OPEC+ - proposed on Thursday a provisional cut of 600,000 barrels per day (bpd), three sources told Reuters.

OPEC producers in OPEC+ are currently discussing whether to meet earlier than their scheduled gathering in Vienna on March 5-6.

Earlier Russia said it needed more time to decide whether to join any additional oil output cuts by OPEC, saying US crude production growth would slow and global demand remained solid.

Energy Minister Alexander Novak was speaking as the OPEC pushes Moscow to make a decision on whether to cut output more in response to the coronavirus outbreak that has hit the global economy.

A technical panel that advises OPEC and its allies, led by Russia - a grouping known as OPEC+ - proposed on Thursday a provisional cut of 600,000 barrels per day (bpd), three sources told Reuters.

Novak said Moscow needed more time to assess the situation, stopping short of giving a clear Russian position on the proposal. Oil prices have come under pressure recently in the absence of a Russian response to calls for more output cuts.

“I can’t tell you about my position right now, maybe we will say it next week,” Novak said when asked about Moscow’s position. “Russia needs a few days for market analysis.”

Russian Foreign Minister Sergei Lavrov, at a news conference in Mexico City on Thursday, said via interpreters that Moscow supported “the idea”, when asked about the proposal.

However, a foreign ministry transcript of his comments suggested he was speaking in general terms.

Lavrov was asked: “Is Russia planning to support the call by OPEC+ to cut oil production, as was suggested at a recent emergency meeting?”

He replied: “We are actively supporting cooperation within the framework of OPEC+ and collaboration between oil exporting countries, including both OPEC and non-OPEC countries.”

On Friday, Novak said global oil demand might fall by 150,000 to 200,000 bpd this year due to the virus outbreak and other negative factors, lower than other forecasts. Novak said his estimate was “an insignificant volume, taking into account that the volatility in consumption also depends on many factors, such as Libya, Iran, Venezuela, where supply is also quite volatile”.

Others have suggested a much bigger impact. BP said a global slowdown was expected to reduce 2020 oil demand growth by 300,000-500,000 bpd, or up to 0.5 percent of total demand.