Saudi Sides with Oil Consumers as OPEC Nears Pivotal Talks

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Looming large over markets, however, was a June 22 meeting in Vienna of OPEC together with some other producers including Russian Federation, to discuss forward supply policy. Oil prices stabilized on Wednesday, with the Brent crude unchanged at $75 per barrel.

"We are making good progress", said United Arab Emirates Energy Minister Suhail Al Mazrouei, who also now holds the position of OPEC president.

"Yergin said Saudi Arabia and the United Arab Emirates support the current, tougher US policy toward Iran, Saudi Arabia's rival for influence in the region, and so will want to support Trump's call for lower prices".

Mr. Pradhan went on to say that the prices of oil and gas had become subject to the "vagaries of geopolitics" and urged the OPEC countries to commit towards ensuring more sustainable prices.

Brent reached a 3-1/2-year high above $80 a barrel last month but has fallen steadily in recent weeks as Saudi Arabia, de facto leader of Opec, has signalled it intends to raise production to stabilise prices.

A potential tariff would also limit the revenues of US oil exporters and force them to accept even steeper discounts to find new buyers of their oil to replace the sales in their second-largest single oil export market after Canada, analysts warn.

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Saudi Arabia and Russia's desire to roll back production cuts has encountered fierce opposition from Iran and Venezuela, while U.S. President Donald Trump has lobbed the occasional rhetorical bomb at the cartel on behalf of consumers.

The brewing tensions between the world's two largest economies comes ahead of Friday's highly anticipated meeting of oil ministers from around the globe at the Organization of the Petroleum Exporting Countries in Vienna. The paper agreement would see production increase by 1 million barrels a day to bring the group back to target.

OPEC takes its decisions by unanimity, so if Iran were to wield its veto Saudi Arabia would be left only with the option of assembling a coalition of willing countries to bypass Tehran's opposition.

"Allocating to Saudi Arabia part of the quota of countries that cannot increase output could be a technical solution, but may not be a political one", Al-Falih said.

So far there is no indication that Iran and the other members would agree to such a reallocation, although with officials holding extensive talks in the run-up to Friday's Opec meeting, further compromise could be made.

Trump's involvement in pressing for OPEC to act - which in addition to his tweets include a behind-the-scenes request for a 1 million-barrel-a-day supply hike - could make it hard for Tehran to accept a compromise. Off-topic, inappropriate or insulting comments will be removed.

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