OPEC's Sequel to Oil Deal Faces Struggle
Iran’s exports remain a wild card. The collapse in crude prices of about 40 percent from their October peak was precipitated in part by the Trump administration unexpectedly granting of six-month waivers to some of the Persian Gulf nation’s biggest customers. Only he will decide whether this crude continues to flow after those exemptions expire.
Laggards and Cheats
The IEA’s outlook also hinges on another fragile assumption: that other OPEC+ members will honor their promised curbs in full.
Saudi Arabia led the way in 2017 by cutting even deeper than pledged, and it appears willing to make the same sacrifice now. Yet other major producers that lagged behind before -- most notably Iraq and Kazakhstan -- may once again prove slow and unreliable in their implementation.
Iraq, which made less than a third of its pledged cuts according to the IEA, now has more production capacity at its disposal as it pushes on with new projects and restores output halted during a political dispute with its Kurdish population. Kazakhstan was the only signatory that actually increased output during the agreement.
If prices continue to languish, selling that extra crude to boost revenue could prove very tempting.
“The big question is whether OPEC+ is up to the task,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA.
--With assistance from Mohammed Aly Sergie.To contact the reporter on this story: Grant Smith in London at email@example.com To contact the editors responsible for this story: James Herron at firstname.lastname@example.org Christopher Sell
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