OPEC officials are working to nail down details of their plan to limit oil supply and gaps over some sticking points are narrowing, OPEC sources said, a sign of progress in finalizing the exporter group’s first such deal since 2008.
OPEC agreed in Algeria on Sept. 28 to limit supply with special conditions given to Libya, Nigeria and Iran, whose output has been hit by wars and sanctions. The details are meant to be finalized when OPEC ministers meet in Vienna on Nov. 30.
With two weeks to go, differences persist over details and the prospect of a supply glut persisting in 2017 has weighed on oil prices LCOc1, which are below $47 a barrel. Crude reached a 2016 high near $54 after the September deal.
“It is difficult at some points but I don’t see any deadlock,” one of the sources said. “What happened in Algeria gave a lot of hope and impetus and I think people are committed to that.”
One issue has been the level of production at which Iran would be expected to freeze its output.
Sources say Iran wants an output cap of 4 million barrels per day, while other members of the Organization of the Petroleum Exporting Countries want Iran to freeze supply at about 3.7 million bpd.
This issue, several OPEC sources told Reuters, was a source of tension at an Oct. 28 meeting in Vienna of the High Level Committee, a panel looking at how to divide the Algeria agreement into individual supply limits.
Other OPEC members are willing to be more flexible on this, two sources said. One of them said while meeting Iran’s demand for 4 million bpd was unlikely, Tehran would probably be offered a figure of 3.75 million bpd or higher.
“Whatever it takes to reach a consensus will be taken by the ministers,” said a third OPEC source familiar with discussions, referring to finding a compromise over Iran. “We cannot leave Vienna on November the 30th without an agreement.”
The High Level Committee meets for a second time in Vienna on Monday, and a number of OPEC ministers are likely to hold talks informally in Doha on Friday on the sidelines of a gas conference.
In a further effort to forge consensus, OPEC Secretary-General Mohammed Barkindo is visiting more OPEC members in the next few days. He is scheduled to meet Venezuelan President Nicolas Maduro later on Wednesday, and he then travels to Ecuador and Iran, a source said.
Barkindo said on Nov. 7 that OPEC was committed to implementing the deal.