Saudi Arabia, Iraq agree oil output cut needs nine-month extension

BAGHDAD/VIENNA: Opec heavyweights Saudi Arabia and Iraq agreed on Monday on the need to extend a global cut in oil supply by nine months in an effort to prop up crude prices, removing a potential stumbling block as producing countries prepare to meet this week.
Saudi Energy Minister Khalid al Falih said he did not expect any opposition within the Organization of the Petroleum Exporting Countries to extending the curbs for a further nine months, speaking after he met his Iraqi counterpart in Baghdad.
Opec meets in Vienna on Thursday to consider whether to prolong the original deal reached in December in which Opec and 11 non-member countries, including Russia, agreed to cut output by about 1.8 million barrels per day in the first half of 2017.
The Saudi minister told a joint news conference with his Iraqi counterpart Jabar Ali al Luaibi that Iraq had given the “green light” to a proposal for a nine-month extension that would be presented to the meeting in the Austrian capital. He said a new agreement would be similar to the previous pact, with minor changes.
He said any decision would not be finalised until Opec meets.
Falih was paying a rare visit to Iraq in the latest effort by the top oil producer to convince its fellow Opec member to extend supply cuts to ease a global glut.
Iraqi Oil Minister Jabar Ali al Luaibi said he agreed with Saudi Arabia on the need for a nine-month extension.
Saudi Arabia and non-Opec Russia have been pushing to extend the cuts from the end of June until March 2018.
Iraq had until Monday voiced support only for a six-month extension. It is the first time in nearly three decades that a senior Saudi energy official has visited Baghdad.
Opec wants to reduce global oil inventories to their five-year average but so far has struggled to do so. Stockpiles are hovering near record highs, partly because of rising production in the United States, which is not part of the existing deal.
“I believe we have a growing consensus (on the duration of cut extension),” Opec’s Secretary General Mohammad Barkindo told reporters in Vienna. — Reuters