Opec+ will address any supply increases from the flow of Iranian barrels back to the market if sanctions on the country are eased, according to Saudi Arabia's energy minister.
"We are ready to any of these consequential issues that may require us to attend, the will is there, the sense of responsibility is there,” Prince Abdulaziz bin Salman Al Saud told reporters at the conclusion of a joint ministerial monitoring committee meeting in Abu Dhabi.
On Wednesday, oil prices closed in the negative for a second consecutive day as markets phased out geopolitical risk premiums following the dismissal of US National Security Advisor John Bolton as well as the possibility of sanctions easing on Iran.
Mr Bolton was a champion of economic sanctions against key Opec producers Iran and Venezuela, which have both seen steep decline in exports. With his departure, the oil markets, which are already oversupplied with US shale, must brace for the flow of more barrels.
Opec+, the alliance led by Saudi Arabia and Russia, has been cutting back 1.2 million barrels per day (bpd) from the markets since the beginning of January in a bid to keep the crude inventory overhang in check. The Opec+ pact, which will be reviewed at a meeting of the producers in Vienna in December, is expected to hold until March next year.
Russian energy minister Alexander Novak, whose country is also party to the production curbs said that the group would evaluate future supply scenarios and take measures if needed.
Market uncertainty had been complicated by the ongoing US-China trade war and currency devaluations, Mr Novak said.
"One of the factors we discussed today is a slowdown in global growth and it worries us deeply,” he said.
At its latest review of production curbs so far, Opec+ compliance stood at 136 per cent, with Iraq and Nigeria, which had exceeded their production quotas, pledging to cut back. Saudi Arabia, which has undertaken the lion’s share of cuts so far, cutting back nearly 500,000 bpd from its average of 10.311 million bpd last year, said it would continue to keep its output below 10 million bpd. Its production for the month of September would be 9.890 million bpd, the new Saudi energy minister said, a slight increase from August where it had produced at 9.805 million bpd.
Iraq, Opec’s second biggest producer, said it had found conformity challenging as it needed to meet “practical” domestic considerations but will subscribe to the voluntary adjustments from next month onwards.
"We have already actioned cuts in production and export levels as of today,” Iraqi oil minister Thamir Ghadhban told reporters.
"September's export and production levels will be significantly lower than in August and deeper cuts will be implemented from 1 October, and we will do our best and we’re firmly committed to our stand,” said Mr Ghadhban, who also serves as the country’s deputy prime minister.
Nigeria’s new oil minister Timipre Silva has also pledged support, noting that while there has been "some degree of non-compliance”, they had agreed to fully comply from October onwards.
“This is official from Nigeria,” he said.
Analysts such as Sarah Vakhshouri of Washington-based SVB Energy observed that the meeting, the first for Prince Abdulaziz, marked a "distinguished difference” with his predecessor Khalid Al Falih who was dismissed from his position last week.
"His 'Opec diplomacy' is to take the decision making process back to its traditional way of 'consensus', rather than [have] Saudi [Arabia] and Russia use their influence to direct the Opec decisions,” she said.