Opec+ working on compromise for 2021 oil policy

LONDON: Opec+ have moved closer to a compromise over oil supply policy for 2021 after talks failed to yield a decision on how to tackle weak oil demand amid second coronavirus wave, Opec+ sources said. The Organization of the Petroleum Exporting Countries, Russia and their allies, a group known as Opec+, had been widely expected to extend existing oil cuts of 7.7 million barrels per day (bpd), or 8 per cent of global supplies, until at least March. But after hopes for speedy approval of anti-virus vaccines spurred an oil price rally at the end of November, several producers started questioning the need to keep such a tight rein on oil policy, as advocated by Opec leader Saudi Arabia. Opec+ sources have said Russia, Iraq, Nigeria and the United Arab Emirates have all to a certain extent expressed interest in supplying the market with more oil in 2021. “Things are heading towards a compromise,” one Opec delegate said. Energy Aspects, a consultancy, wrote: “We understand that there has been tentative progress in discussions between Opec+ members and that ministers are inching closer to a compromise that should break the impasse.” Sources have said options now range from a rollover of existing policies to easing cuts each month by between 0.5 million to 1.0 million bpd starting from January, February or March. Sources said the preferred option was a combination of those proposals, initially rolling over existing cuts with a gradual output increase starting in later months. — Reuters