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OPEC, others to discuss oil output increase sharing

A technical committee consisting of the Organisation of Petroleum Exporting Countries and non-OPEC producers will discuss proposals for sharing out an oil output increase, sources familiar with the matter have said, a tense topic for the producer group after it decided in June to ease supply curbs.

A panel called the Joint Technical Committee will on Tuesday consider proposals on distributing the agreed output increase of one million barrels per day, Reuters quoted the sources as saying on Friday.

“The talks will look at various mechanisms” to reach the required production level, a source said.

If resolved, the talks could lead to an easing of tensions within OPEC. Iran had been against the June decision, which came amid pressure from United States President, Donald Trump, to reduce oil prices.

There are four proposals on how to distribute the increase, presented by Iran, Algeria, Russia and Venezuela, one of the sources said, suggesting agreement would not be straightforward.

One idea, to share it pro-rata among participating countries, is unlikely to be approved by Russia and Saudi Arabia since it will give them less than the supply boosts of 300,000 and 400,000 bpd that they respectively want, the source said.

OPEC, Russia and other non-members agreed in June to return to 100 per cent compliance with oil output cuts that began in January 2017. Months of underproduction in Venezuela and elsewhere had pushed adherence above 160 per cent.

The June meeting concluded with a deep disagreement between Saudi Arabia and Iran, long-time rivals in OPEC.

Saudi Arabia said the decision implied a reallocation of extra production from countries unable to produce more to those, such as Riyadh, that can. Iran, facing a forced cut in its oil exports because of US sanctions, disagreed.

The proposals will next be presented to ministers attending a monitoring meeting in Algeria on September 23, sources said.

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