VIENNA • Iran appeared yesterday to be the main obstacle for an Opec deal to cut oil production as the group's leader, Saudi Arabia, has yet to agree on exemptions for sanctions-hit Teheran, two Opec sources said.
The Organisation of the Petroleum Exporting Countries (Opec) resumes discussions in Vienna during the day before heading into a meeting with non-Opec oil producers led by Russia.
On Thursday, Opec tentatively agreed to an oil output cut, but could not decide concrete parameters for reductions as it was waiting for a commitment from non-Opec heavyweight Russia, sources from the group said.
Yesterday, two Opec sources said Saudi Arabia's arch-rival Iran, which came under fresh United States sanctions last month, was also holding up a final deal.
"Iran will insist on an exception until sanctions are removed," one of the sources said.
Saudi Arabia has come under pressure from US President Donald Trump to help the global economy by refraining from cutting supplies.
The price of crude has fallen almost a third since October to below US$60 a barrel as Saudi Arabia, Russia and the United Arab Emirates raised output to offset lower exports from Iran, Opec's third-largest producer. The price decline prompted Opec and its allies to discuss output cuts.
And with Mr Trump seeking to squeeze Teheran with sanctions, an Opec output cut would provide additional support to Iran by increasing the price of oil.
Possibly further complicating any Opec decision is the crisis around the killing of journalist Jamal Khashoggi at the Saudi consulate in Istanbul in October.
Mr Trump has backed Saudi Crown Prince Mohammed bin Salman, despite calls from many US politicians to impose stiff sanctions on Riyadh.
US special representative for Iran Brian Hook met Saudi Energy Minister Khalid Al-Falih in Vienna this week in an unprecedented development ahead of an Opec meeting. Saudi Arabia first denied the Hook-Falih talks took place.
The price of crude has fallen almost a third since October to below US$60 a barrel as Saudi Arabia, Russia and the United Arab Emirates raised output to offset lower exports from Iran, Opec's third-largest producer.
The price decline prompted Opec and its allies to discuss output cuts, and Mr Falih said on Thursday possible reductions by those involved ranged from 500,000 barrels to 1.5 million barrels per day.
A reduction of one million barrels a day would be acceptable and so far was the main scenario, Mr Falih said, but added that Russia needed to commit significant volumes.
He told reporters: "We still want Russia to cut as much as possible."
Russian Energy Minister Alexander Novak met President Vladimir Putin in St Petersburg on Thursday and was flying back to the Austrian capital yesterday morning.
Opec was due to resume its meeting after 0800 GMT (4pm Singapore time), followed by talks with allies after 1100 GMT.
Russia, Saudi Arabia and the US have been vying for the position of top crude producer in recent years. The US is not part of any output-limiting initiative due to its antitrust legislation and fragmented oil industry.