Vienna — OPEC and its allies are unlikely to extend their production cut agreement when they meet this week, a key Iranian oil official said Tuesday, with some members upset over recent output increases by Saudi Arabia and Russia.
Hossein Kazempour Ardebili, Iran's OPEC governor, said he expects some countries -- which he did not name -- to pull out of the agreement in protest over behavior that had sharply decreased oil prices.
"The cooperation agreement is unlikely to be renewed," he said in comments published by Iran's oil ministry. "At least some member states will not join it, in which case any renewal will be out of the question."
In fact, some producers without the capacity to pump more may leave OPEC altogether, he said. Qatar on Monday surprised OPEC by announcing it was withdrawing from the organization from January 2019.
"Some producers have limited production capacity. Therefore, they may be faced with lower demand for production, while on the other hand, they lack any spare capacity for increased production, if need be," he said in comments published by Iran's oil ministry. "That strengthens the possibility of exit by minor member states. That is not impossible."
OPEC meets Thursday in Vienna to discuss output strategy, with Saudi Arabia, the UAE and other members pushing for a cut that they say will be needed to avoid a supply glut. Officials have cited market forecasts showing a surplus of 1 million to 1.4 million b/d in the months ahead.
Russia and nine non-OPEC partners will join the talks Friday.
--Edited by Alisdair Bowles, email@example.com