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Saudi Arabia persuades Iran and OPEC to agree increase in oil production


OPEC has agreed to increase oil production by one million barrels a day after a stormy meeting that saw Iran walk out of negotiations.

The United States, China and India had been pushing for a rise in production to avert a supply shortage later in the year.

Iran had balked at the request because it faces sanctions after President Donald Trump ripped up an international nuclear agreement.

Mr Trump has also increased pressure on OPEC to raise production ahead of mid-term elections in the US in November.

Bijan Namdar Zanganeh, Iran’s oil minister, stormed out of the meeting on Thursday evening.

But on Friday, Saudi Arabia’s energy minister Khalid al-Falih persuaded Mr Zanganeh to accept the proposal Riyadh and non-OPEC member Russia had been championing.

“It will be 1m collectively,” Mr Falih said as he left the meeting, although the final communique did not mention the figure.

The final production hike is expected to be less than the one million barrels as many producers may struggle to increase production.

The Organisation of the Petroleum Exporting Countries met in Vienna in an effort to cool the market after oil prices rose to $80 a barrel.

There is concern that a shortage and rising prices could cripple the global economy.

OPEC and Russia agreed last year to cut production by 1.8 million barrels a day to lift oil prices ,which had fallen to a low of $27 in 2016.

Source:  Sky News,  UK, 22 June 2018

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