Oil ministers back output hike despite Irans walkout

The talks, held as the cartel hosted an global energy conference attended by hundreds of officials, executives and investors, will shape oil prices, energy stocks and currencies of petroleum-exporting countries for months to come.

Iran had been expected to oppose any rise in crude output, but it has now signaled it may support a small increase.

Brent reached a 3-1/2-year high above $80 a barrel last month but has fallen steadily in recent weeks as Saudi Arabia, de facto leader of OPEC, has signaled it intends to raise production to stabilize prices.

Khalid al-Falih, Energy Minister of Saudi Arabia, on Thursday said an increase of 1 million bpd might be "a good target to work with".

Iranian OIl Minister Bijan Zanganeh's exit from a meeting in Vienna on June 21 threw into question whether Russian Federation and the OPEC oil cartel will be able to reach agreement on their proposed 1 million-barrel-a-day production increase, the first such rise since the group agreed to freeze production in 2016.

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In the two-day meet, India will pitch for "responsible" crude pricing by oil producers' cartel OPEC, Union Minister Dharmendra Pradhan had said as petrol and diesel prices skyrocketed in the country.

An increase in Opec production will be particularly helpful for the VLCC market, which is on track for the worst year in history due to severe vessel over-supply, according to Amit Mehrotra of Deutsche Bank.

Iran has bulked at the request because it faces sanctions after President Donald Trump ripped up an worldwide nuclear agreement.

"We want to prevent the shortage and the squeeze that we saw in 2007-2008", Falih said.

Brent oil clocked a session high of $74.21 earlier today and was last seen trading at $74.00 - up 1.25 percent on the day.

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"Yergin said Saudi Arabia and the United Arab Emirates support the current, tougher USA policy toward Iran, Saudi Arabia's rival for influence in the region, and so will want to support Trump's call for lower prices".

In a night of drama in Vienna, the Joint Ministerial Monitoring Committee, which recommends policy to the group, reached an agreement despite Bijan Zanganeh, the Iranian oil minister, walking out of the meeting and predicting Opec won't reach a final deal when it meets formally on Friday.

He said that there are "many, many options. and we will settle to one of those options".

Observers believe a face-saving deal could be brokered if members simply stopped over-complying with the current pact, and agreed to stick to the original reduction quotas - which would bring several hundred thousand more barrels to the market each day.

On Friday afternoon Opec confirmed reports that a deal had been struck to reverse some of the cuts in place since 2016.

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OPEC takes its decisions by unanimity, so if Iran were to wield its veto Saudi Arabia would be left only with the option of assembling a coalition of willing countries to bypass Tehran's opposition.

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