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By Angelina Rascouet and Grant Smith, Bloomberg News
OPEC is embarking on a last-ditch diplomatic push to reach an agreement for a cut in crude production, with the oil ministers of Algeria and Venezuela heading to Russia to get the group’s biggest rival on board.
The Organization of Petroleum Exporting Countries will meet on Wednesday in Vienna to finalize the terms of its first production decrease in eight years. OPEC’s three biggest producers — Saudi Arabia, Iraq and Iran — remain divided about how to allocate the planned output reduction. Russia has so far resisted OPEC’s request that it join the cut.
In an unexpected move, Algerian Energy Minister Noureddine Boutarfa, one of the architects of OPEC’s September accord to reduce output, and Venezuela’s Eulogio Del Pino, a regular intermediary in the group’s discussions, will meet in Algiers and then travel to Moscow on Monday, according to two delegates familiar with the matter. They asked not to be identified as the talks are private.
OPEC is also proposing a 600,000 barrel a day output cut by non-OPEC producers. Russian Energy Minister Alexander Novak has repeatedly said his country prefers to freeze rather than reduce output.
While efforts to secure the cooperation of non-members continue, OPEC nations are still trying to agree among themselves about how much each should cut. The organization, which had planned to hold technical discussions with non-members on Monday, will instead hold an internal meeting to resolve the differences.
Algeria’s Boutarfa presented Iranian Oil Minister Bijan Namdar Zanganeh with a proposal for a collective cut of 1.1 million barrels a day in Tehran on Saturday. Iran had previously said it should be allowed to continue increasing production as its exports recovered from nuclear-related sanctions that were eased in January.
Boutarfa will also meet with his Iraqi, Saudi and Qatari counterparts in Vienna ahead of the OPEC ministers’ meeting on Wednesday, according to the state news agency Algerie Presse Service. Failure to reach a deal could lead oil prices to drop below $40 a barrel, APS reported, citing Boutarfa. Iraq has said it will participate in output curbs, having initially resisted joining in the effort.
However, Iraq hasn’t clarified how big a production it’s willing to make.
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