x Abu Dhabi, UAEFriday 28 July 2017

Opec reaches compromise as Iran sanctions loom

Group meets against backdrop of additional European sanctions targeting Iran's nuclear programme that come into effect later this month.

VIENNA // Opec decided to leave its output target unchanged yesterday after reaching a compromise between price hawks and Gulf nations that have sought higher levels out of concern about the stalling global economy.

Prices have fallen more than 20 per cent since the start of the year to US$97 (Dh356) a barrel.

The oil exporting group retained a supply ceiling of 30 million barrels per day (bpd) without allocating quotas to individual members of the 12-member organisation.

"Now we have 30 million [barrels] for all of us," said Mohamed Al Hamli, the UAE energy minister. "We are comfortable with the overall" target.

The group met against the backdrop of additional European sanctions targeting Iran's nuclear programme that come into effect later this month, and a global economic crisis that the Gulf nations fear will depress oil prices.

The UAE, Kuwait and the Opec powerhouse Saudi Arabia hold most of the group's three-million barrel spare capacity. Saudi Arabia recently ramped up its output to 10 million bpd - its highest level in three decades - in a move that helped push the oil price to below $100 a barrel from its March high of $128.

Mr Al Hamli said a price of $100 a barrel was acceptable.

"The European crisis is part of the problem because the state of the economy is quite alarming and that actually spills over," he said. "The price of oil reflects that situation."

Opec's price hawks - Iran, Venezuela and Iraq - said a price as high as $120 was acceptable and have criticised other members for filling the gap left by the drop in Iranian supplies.

ayee@thenational.ae