Saudi struggles for Gulf oil producers’ support ahead of OPEC meeting

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VIENNA (Reuters) – Saudi Arabia is struggling to reach a unified position with fellow Gulf crude producers on the need to raise oil output, sources familiar with the talks said on Wednesday, adding to complications ahead of an OPEC meeting this week.

FILE PHOTO: The logo of the Organization of the Petroleoum Exporting Countries (OPEC) is seen at OPEC’s headquarters in Vienna, Austria June 19, 2018. REUTERS/Leonhard Foeger

The Organization of the Petroleum Exporting Countries meets on Friday to decide on output policy amid calls from major consumers such as the United States and China to cool down oil prices and support the global economy by producing more crude.

There are different views on how much to increase production and whether such a move should be gradual, one source said.

Iran said on Tuesday OPEC was unlikely to reach a deal on oil output this week, setting the stage for a clash with Saudi Arabia and Russia, which are pushing to raise production steeply from July to meet growing global demand.

OPEC kingpin Saudi Arabia does not want to be seen as putting too much pressure on Iran, while non-member Russia is seen as possibly able to convince Tehran, the sources said.

Iraqi Oil Minister Jabar al-Luaibi said on Wednesday he hoped there would be agreement when OPEC meets but added: “The oil market has not reached the level of stabilization.”

Nigerian Oil Minister Emmanuel Ibe Kachikwu, asked by reporters about his position on easing output cuts, said: “We need to discuss with our colleagues first before we make those decisions.”

“All options are on the table,” he said.

Russian Energy Minister Alexander Novak has said Russia wants OPEC and non-OPEC to raise output by 1.5 million barrels per day (bpd), effectively wiping out existing production cuts of 1.8 million bpd that have helped rebalance the market in the past 18 months and lifted oil prices to $75 per barrel from as low as $27 in 2016.

Saudi Arabia has also proposed relaxing production cuts gradually, while OPEC members Iran, Iraq, Venezuela and Algeria have opposed such a move.

On Tuesday, Iranian Oil Minister Bijan Zanganeh told reporters that he would leave Vienna on Friday before OPEC holds talks with non-OPEC producers the next day. He said a recent rise in oil prices was mainly the fault of Washington, which imposed new sanctions on OPEC members Iran and Venezuela.

Additional reporting by Alex Lawler, Shadia Nasralla, Ahmad Ghaddar, Vladimir Soldatkin; Writing by Dale Hudson; Editing by Dmitry Zhdannikov

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