Related Articles
Forward article link
Share PDF with colleagues

How an Opec deal could work

Iran’s demands can be accommodated with some adjustments of the numbers

Getting Opec’s fractious members to agree on cuts has always been difficult: herding cats is easier. But the geopolitical rivalry between Saudi Arabia and Iran, enemies in proxy conflicts from Yemen to Syria, makes the negotiations underway now even harder. Iran is under less pressure than Saudi Arabia. The kingdom’s economy is suffering, while its rival enjoys a post-sanctions recovery. One equation sums up their different stances in negotiations about whether to cut output to support prices. Say Saudi Arabia slashes 0.5m barrels a day from its output – the idea it has floated – to 10.1m b/d, and gains a $5-a-barrel lift in the oil price, from $46 to $51/b. Its daily income rises by about

Also in this section
Saudi Arabia gets a new next king
21 June 2017
Mohammed bin Salman will have a free hand as the next Saudi king but faces formidable domestic and regional hurdles. Oil policy is one
Arab oil states: the devil's in Opec's data
20 June 2017
The group's latest figures show Gulf oil states' earnings have plummeted, while the region's population keeps rising
Eastern Libya tries to wrest control of oil supply again
15 June 2017
NOC output growth plans threatened by renewed dispute