Business

OPEC meeting: The cartel and Russia likely to raise crude output

Updated : June 21, 2018 04:14 PM IST

India is in favour of a raise in production as it is hurting the oil prices back home with fuel prices reaching about Rs 70 in the National Capital Region.

On Wednesday, the Brent prices rose ahead of the OPEC meeting by 50 cents to $75.58 a barrel per day.

The Organisation of Petroleum Exporting Countries (OPEC) and Russia, world’s biggest non-OPEC oil producer, are holding a biannual meeting in Vienna on June 22 to decide the future of the oil market.

Saudi Arabia and Russia are already pushing for an increase in the production, which had imposed 1.8 million barrels per day (bpd) production cut since 2017, with prices propping up to about $77.59 bpd in May 2018.

India, a net importer of oil, is in favour of a raise in production as it's hurting the economy, with fuel prices reaching about Rs 70 in the National Capital Region.

“Political conditions, sometimes internal and sometimes external, result in reduced output of some countries. We expect from OPEC and its members a commitment to step in (and) more than fill the gap to ensure sustainable prices,” said Dharmendra Pradhan, Minister of Petroleum and Skill Development, on Tuesday.

The unending geopolitical tension and a dramatic drop in production in Venezuela and a prospect of renewed sanctions on Iran, after US President Donald Trump pulled out of an international nuclear deal with Tehran, helped the crude prices to rise.

Iran, the third largest crude producer and a major exporter to India, said the OPEC members should not take a decision on the output policy by getting pressurised from countries such as US and China to get the prices down, and support the global economy by increasing the output.

Iran has signalled that it might allow a small increase in oil output saying that OPEC members that had over-delivered on cuts should return to compliance. This would effectively mean a modest boost from producers such as Saudi Arabia that have been cutting its output more deeply than planned.

On Wednesday, the Brent prices rose ahead of the OPEC meeting by 50 cents to $75.58 a barrel per day.

OPEC meeting: The cartel and Russia likely to raise crude output

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