Saudi Arabia is discussing a proposal that could see the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers cut output by up to 1 million barrels per day (bpd), two sources told Reuters on Sunday, as the world’s top oil exporter grapples with a drop in crude prices.
The sources said any such deal would depend on factors including the level of Iranian exports after the United States imposed sanctions on Tehran but granted Iran’s top oil buyers waivers to continue buying oil. Riyadh was surprised by the waivers granted to customers such as China and India, a move which hit oil prices, at least three industry and OPEC sources told Reuters.
Now Saudi Arabia wants to act to prevent a further slide in prices which fell below $70 a barrel on Friday, and is leading discussions on cutting oil output next year, the sources said. Under a deal set to expire at the end of the year, OPEC and non-OPEC producers agreed to curb output by around 1.8 million bpd.
Bigger cuts
But producers ended up cutting more - partly due to unexpected outages in Venezuela, Libya and Angola - and so agreed in June to limit cuts to the agreed level, meaning restoring about 1 million bpd in output.
OPEC and its allies will meet in Vienna on December 6-7 to decide on output policy for 2019.
