OPEC and its 10 non-OPEC partners need to produce more oil to meet demand in the second half of the year. Saudi energy minister Khalid al-Falih said Thursday. pressing the case for the coalition to ease its output quotas.
But how any production increase would be divvied up between the countries had yet to be decided. he said.
`The market needs more oil than is currently being produced by these 24 countries.` Falih told reporters in Vienna. where the coalition is gathering for talks on the deal. `Ultimately. we will meet the needs of the market. Consumers are asking for more supply in the second half.`
But he added that OPEC would take into account every country`s situation in building a consensus on output policy.
`We have to be sensitive to all member countries and listen to their desires.` he said. `Some have said. `We can`t produce and don`t increase our production limit.` so I think we just have to wait and listen and come up with a decision that satisfies all stakeholders.`
OPEC produced 31.90 million b d in May. according to the latest S&.P Global Platts OPEC survey. That`s about 840.000 b d below its ceiling of around 32.74 million b d. when every country`s quota is added up.
But Falih said OPEC producing collectively at its full compliance level was not a viable solution.
`Some of the extra conformity that we have seen by producers is involuntary.` Falih said during a panel session at the OPEC Seminar. `Reallocating [allocations] to other countries like Saudi Arabia may be a technical solution. but it may not be politically agreeable to others.`
OPEC will decide Friday on the future of the production cut agreement. with Saudi Arabia and non-OPEC Russia pushing for rolling back the supply caps.
Russia has proposed a 1.5 million b d increase. but Iran. Iraq and Venezuela have said they are adamantly against any lifting of the quotas.
Iran is facing US sanctions on its oil sector that go into effect in November. while Venezuela`s oil production has been reeling from a severe economic and political crisis.
Later Thursday. Falih will chair a meeting of the six-country OPEC non-OPEC monitoring committee overseeing the cuts. which also includes Russia. Kuwait. Venezuela. Algeria and Oman.
Iran and Iraq have been invited.
Falih said any raising of output would be measured.
`We will not allow the glut to materialize again.` he said at the OPEC Seminar. `That is not in the interest of consumers or producers. But at the same time. we are not going to allow short-term fears to be realized that the market will be squeezed.`