OPEC proposed mid-July meetings with its allies in Vienna to discuss extending production cuts, after talks between Russia and Iran made some progress toward resolving a standoff over the date.
The oil producers group, which pumps more than half the world’s crude, has been bickering for a month about the timing of ministerial talks. Their failure to agree a date just weeks before their production cuts expire gives turbulent markets little reassurance as crude prices extend their slump.
After discussions with his Russian counterpart on Monday, Iran’s Oil Minister Bijan Namdar Zanganeh said he was willing to hold a meeting on July 10 to 12, a week later than most other members had wanted. The Organization of Petroleum Exporting Countries formally proposed those dates to members on Tuesday and said it would await their responses, according to a delegate from the group.
While this marked a small victory for Zanganeh, Iran had to drop its previous insistence that OPEC should gather next week.
“I don’t have a problem with July 10 to 12,” Zanganeh told reporters in Tehran on Monday. “I cannot meet 3rd or 4th of July. It’s not that I’m opposed to it, I can’t meet then.”
Five delegates from the group, who asked not to be named while discussing internal deliberations, said on Monday that they weren’t certain that Iran’s proposal would be accepted by other members.
Russian Energy Minister Alexander Novak said he is ready to consider holding the meeting on July 10 to 12, but hasn’t yet discussed the dates with his Saudi counterpart Khalid Al-Falih, according to reports from Interfax and RIA Novosti.
The original request to shift the date of the meeting from June to July came from Russia, which despite being an outsider has exerted a strong influence over the group since joining forces almost three years ago.
Differences over the timing began as a mere scheduling clash, but escalated rapidly into a diplomatic spat that pitted long-standing regional rivals Saudi Arabia and Iran against each other. The dispute played out amid a broader geopolitical confrontation as the Saudis — and the U.S. — accused Iran of complicity in attacks on two oil tankers near the Strait of Hormuz on June 13. Iran, which is under U.S. sanctions, denied culpability.
Algeria, like Iran, initially opposed pushing the meeting to July, saying the new date would conflict with a planned election in the North African country. The Algerians later canceled their July 4 vote, leaving Iran as the sole holdout against the rescheduled meeting.
Zanganeh, when asked about Russian minister Novak‘s response to his proposal for July 10-12, said: “He’s not the decision maker, the decision maker is OPEC and OPEC must reach a consensus.” Novak left the meeting in Tehran without speaking to reporters.
For all the uncertainty over the meeting date, OPEC and its allies appear to be heading for an extension of their production cuts amid doubts about the strength of global demand as the economy shows signs of slowing. Saudi minister Al-Falih said earlier this month that he was “sure“ the curbs will continue beyond June.
“There will not be room for the cartel to increase output for the rest of 2019 in our view,” Rystad Energy’s Chief Oil Market Analyst Bjornar Tonhaugen said in a note on Tuesday. “As non-OPEC+ adds more supply than global demand is increasing by, OPEC+ will still be pressured to manage production in order to balance the global market.”