ABU DHABI- Saudi Arabia and Russia called on Thursday for members of OPEC and its allies to better comply with oil production cuts, effectively signaling they want over-producing countries such as Nigeria and Iraq to curb output to help boost oil prices.
The calls from Saudi and Russian energy ministers came after Iraqi oil minister Thamer Ghadhban said on Wednesday OPEC and its allies could discuss deeper cuts amid slowing economic growth due to a U.S.-China trade dispute.
Ghadhban became the first minister to speak about deeper cuts since OPEC and allies, known as OPEC+, agreed to reduce production by 1.2 million barrels per day (bpd), or 1.2 percent of global supply, in December last year.
Two OPEC delegates said deeper cuts could indeed be discussed on Thursday, when some OPEC+ ministers meet for a market monitoring committee in Abu Dhabi ahead of the formal OPEC+ meeting in December.
But Prince Abdulaziz bin Salman, who took over as Saudi energy minister from Khalid al-Falih on Sunday, and Russian energy minister Alexander Novak said on Thursday some producers needed first to comply better with cuts.
“Every country counts regardless of its size … Every country should live up to its commitment” said Prince Abdulaziz.
Novak said “the key goal” of the current deal was “to maintain full conformity with the agreement”.
Oil prices tumbled more than 2% on Wednesday after a report that U.S. President Donald Trump was considering easing sanctions on Iran, which could boost global crude supply at a time of lingering worries about energy demand.
Iraq has been raising its production and exports steeply in recent years, while Iran’s exports have fallen 10-fold over the past year because of U.S. sanctions.
OPEC has been over-complying with cuts on average as Iran’s and Venezuela’s exports collapsed due to sanctions, but some countries such as Iraq and Nigeria have been producing above their quota.
Nigeria, for instance, produced 1.84 million bpd in August versus its target of 1.65 million, while Iraq has been pumping 4.80 million instead of 4.65 million.
OPEC, Russia and other non-members agreed in December to reduce supply by 1.2 million bpd from Jan. 1 this year. OPEC’s share of the cut, which now runs to March 2020, is 800,000 bpd, delivered by 11 members and exempting Iran, Libya and Venezuela.