OPEC strikes 30 million b/d output pact, no quotas
OPEC ministers earlier today put aside the acrimony that had characterized their previous meeting in June and agreed to legitimize current crude output at an overall ceiling level of 30 million b/d.
The agreement doesn’t include individual country quotas but it does cover the production of all 12 members, including Libya and Iraq.
The deal appears to overwrite the previous agreement, which was struck in Oran, Algeria, three years ago. It also appears to pull Iraq, which has been on the periphery of the group for years, back towards an eventual quota.
But it’s very short on detail. OPEC says that as Libyan production rises towards pre-uprising levels, other members will adjust output to accommodate these incremental volumes.
Earlier today, Libyan oil minister Abdelrahman Benyezza said output had now risen to 1 million b/d and would recover to 1.7 million b/d in the second half of next year. This means that OPEC members may need to rein in overall output to the tune of 700,000 b/d some time in the coming months.
Still, what’s a bit of detail, you may ask, when OPEC has avoided another spectacular bustup after the acrimonious split in June as Iran, Algeria and several other countries blocked a Saudi-led proposal to increase production. And when, at a time of deteriorating relations between Saudi Arabia and Iran, the oil ministers of the two key OPEC producers have been able to come together on output policy.
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