Russian Energy Minister Alexander Novak attends the OPEC Ministerial Monitoring Committee in Algiers, Algeria September 23, 2018. [Photo/Agencies]
Russian Energy Minister Alexander Novak said no immediate output increase was necessary, although he believed a trade war between China and the United States as well as US sanctions on Iran were creating new challenges for oil markets.
"Oil demand will be declining in the fourth quarter of this year and the first quarter of next year. So far, we have decided to stick to our June agreements," Novak said.
Seeking to reverse a downturn in oil prices that began in 2014, OPEC, Russia and other allies decided in late 2016 to reduce supply by some 1.8 million barrels per day (bpd).
In June this year, however, after months of cutting by more than their pact had called for, largely due to involuntary reductions from Venezuela and other producers, they agreed to boost output by returning to 100 percent compliance.
That equates to an increase of about 1 million bpd, but the latest data shows they are some way from achieving that target.
In August, OPEC and its allies cut production by 600,000 bpd more than their pact required, mainly as a result of falling output in Iran as customers in Europe and Asia reduced purchases ahead of the US sanctions deadline.
OPEC put Iran's current production at 3.58 million bpd, down some 300,000 bpd from the start of the year, according to OPEC's secondary sources such as researchers and ship-trackers.
Iran's OPEC governor Hossein Kazempour Ardebili insisted on Sunday that Iranian production was steady at 3.8 million bpd but appeared to soften his stance on potential increases in OPEC output.
"If there is a fall not only from Iran, but anybody else, it is the responsibility of OPEC and non-OPEC to balance the market," Kazempour told reporters.
Falih said returning to 100 percent compliance was the main objective and should be achieved in the next two-three months.
Although he refrained from specifying how that could be done, Saudi Arabia is the only oil producer with significant spare capacity.
"We have the consensus that we need to offset reductions and achieve 100 percent compliance, which means we can produce significantly more than we are producing today if there is demand," Falih said.
"The biggest issue is not with the producing countries, it’s with the refiners, it's with the demand. We in Saudi Arabia have not seen demand for any additional barrel that we did not produce."
Falih said the big challenge for 2019 was rising output from non-OPEC producers, which could change the market dynamic and decision-making. The OPEC/non-OPEC monitoring committee next meets on Nov. 11 in Abu Dhabi, followed by a full OPEC gathering at its Vienna headquarters on Dec. 6-7
On Sunday OPEC also published its long-term outlook, steeply revising production growth projections for non-member the United States and saying OPEC would lose market share to rivals in the next five years despite rising oil demand.
Editor:Cherie
