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OPEC, allies agree not to further increase oil production

24 September 2018

Iran itself faces the prospect of much lower oil exports and output in coming months due to fresh US sanctions.

Iranian Oil Minister Bijan Namdar Zanganeh said Iran will definitely veto any decision which threatens its interests. Trump wrote on Sunday.

This time, the deepening trade war between the US and China threatens economic growth in Asia and turmoil in emerging countries could amplify the impact of higher prices on global demand growth.

It also steeply raised US oil output growth estimates to 2023, predicting OPEC would lose further market share. Trump tweeted on Thursday.

Russian Energy Minister Alexander Novak said no immediate output increase was necessary, although he believed a trade war between China and the United States as well as US sanctions on Iran were creating new challenges for oil markets.

OPEC and Russian Federation have capped production since January 2017 to bolster prices. Output fell below those targets this year, and in June the same countries agreed to boost the oil supply.

People look at flags ahead of the OPEC Ministerial Monitoring Committee in Algiers, Algeria September 22, 2018.

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South Korea has bought no Iranian crude oil for about three months after the reimposition of USA sanctions on Tehran, a spokesman for the Iranian oil ministry was quoted as saying on Sunday by the ministry news website SHANA.

OPEC put Iran's current production at 3.58 million bpd, down some 300,000 bpd from the start of the year, according to OPEC's secondary sources such as researchers and ship-trackers.

OPEC's reticence, combined with signs of accelerating supply losses from Iran, created a bullish mood the the annual gathering of the Asian oil industry, traders, refiners and bankers in Singapore on Monday.

Saudi Arabia, Russia and the United Arab Emirates insisted they had the spare capacity to satisfy the market's needs, but wouldn't tap it preemptively.

Al Falih said returning to 100 per cent compliance was the main objective and should be achieved in the next two to three months.

The biggest source of new global supply, USA shale, is also experiencing growing pains as pipeline bottlenecks and workforce issues may hamper growth, he said.

Last week, Opec secretary-general Mohammad Barkindo said in Fujairah that oil producers aimed to agree on a framework for long-term cooperation by December when they meet in Vienna.

OPEC, allies agree not to further increase oil production