Key Opec member countries have expressed support for deeper output cuts, Iraq's oil minister Thamir Ghadhban said, ahead of the ministerial Opec and Opec, non-Opec meetings in Vienna later this week.
Ghadhban said a proposal for Opec and its non-Opec allies to deepen their collective production cut by a further 400,000 b/d is not final, but suggested it would be necessary as a result of slower demand next year. Ghadhban first mooted this proposal for a deeper cut over the weekend.
"A deeper cut is being preferred by a number of key members within Opec," he said on his arrival in Vienna.
According to Ghadhban, Opec and non-Opec countries will, at the very least, extend the production cuts at current levels when they meet on 5-6 December if they fail to agree on deeper cuts.
"It has been calculated that 1.2mn b/d has proven not enough, so an additional cut is required," Ghadhban said. He added that deeper cuts were considered in December 2018, but ultimately vetoed by some member countries.
Ghadhban said such a proposal will likely cover the first half of the year, but stressed that this has not yet been finalized.
But the ability to reach consensus on deeper cuts could be hampered by weak compliance from several Opec+ members, which has regularly prompted Saudi Arabia to shoulder more than its fair share of the production cuts.
Iraq has struggled to keep its production below the 4.51mn b/d ceiling it committed to under the agreement, complying fully in just one of the 24 months it has been participating in the cuts - when bad weather disrupted loadings from its Mideast Gulf terminals in March this year.
Ghadhban said Iraq is currently producing around 4.6mn b/d, delivering "most of the cuts that we promised."
By Rowena Edwards
