Adds quotes from Iran's oil minister throughout
Iraq's oil minister said that the Opec+ group could take further steps to tackle the supply glut, but insisted that any new measures will only be taken in co-ordination with producers outside the 23-country coalition.
Speaking after participating in a hastily-organized video conference with delegates from several other Opec and non-Opec countries yesterday, Thamir Ghadhban said the deal that the Opec+ coalition concluded earlier this month to cut nearly 10mn b/d of crude output in May and June was "just one of the measures" being taken to tackle the current oil market crisis.
The meeting was held in response to the extraordinary falls in global oil prices in the past week, which have been driven by concerns about a shortage of storage availability just as national lockdowns and other efforts to contain the Covid-19 pandemic have dried up global oil demand.
The scale and speed of these price moves — which include Ice Brent futures trading below $20/bl for the first time since 2002, US marker Nymex WTI futures falling into negative territory and Opec's own daily basket price hitting its lowest on record — prompted calls for swift action.
IEA executive director Fatih Birol yesterday urged all countries participating in the agreement to cut production "as soon as possible" and to consider deeper reductions than those agreed by Opec+ at the start of this month. This call was echoed today by Iran's oil minister Bijan Namdar Zanganeh.
"It is clear that we have to speed up the production cuts, and be serious about them," Zanganeh said.
Iraq's Ghadhban said that yesterday's meeting studied a report prepared by the Opec secretariat on the state of the oil market and discussed the repercussions for the global economy of the sharp price drop. He said that the meeting considered additional measures that could be taken to help stabilize the market.
Ghadhban did not specify what these measures were, but Opec delegates told Argus that participants discussed both the possibility of bringing forward the start date of the production cuts from 1 May, and of deepening the agreed level of cuts. But with many Opec+ members not present on the call — including de facto leaders Saudi Arabia and Russia — no decisions were taken.
The call came less than two weeks after the Opec+ coalition agreed to reduce crude output by 9.7mn b/d in May and June. Production cuts will be adjusted to 7.7mn b/d in the second half of the year, and to 5.8mn b/d from January 2021 to April 2022. Each member country will cut from an October 2018 output baseline except for Saudi Arabia and Russia, which both have an 11mn b/d reference level.
Iran's Zanganeh said that because of overproduction in March and April, even 100pc compliance with the new cuts from the start "will have a gradual impact on the market, not immediate". He also said that producing nations outside the Opec+ alliance must make a contribution.
"This crisis… is a universal crisis," he said. "Opec cannot solve this on its own."
