Iran gave OPEC the green light on Friday to reduce oil output by around 0.8 million barrels per day from 2019 after finding a compromise with rival Saudi Arabia over a possible exemption from the cuts, an OPEC source said.
Tehran has emerged as a key sticking point for a deal but sources said the difficulties were now in the past and OPEC was refocusing on talks with non-member producers led by Russia to reduce supplies and prop up oil prices.
“Yes, Iran agreed in principle,” the source said.
OPEC will propose that non-member producers contribute an additional 0.4 million bpd to the cuts, the source said. “It will be stamped when the non-OPEC meeting is done.”
The Organization of the Petroleum Exporting Countries was meeting in Vienna for a second day running, before discussions with its non-OPEC allies scheduled for 1400 GMT.
Saudi Arabia faces pressure from U.S. President Donald Trump to help the global economy by refraining from cutting supplies.
An OPEC output reduction also would provide support to Iran by increasing the price of oil.
Possibly further complicating any OPEC decision is the crisis around the killing of journalist Jamal Khashoggi at the Saudi consulate in Istanbul in October. Trump has backed Saudi Crown Prince Mohammed bin Salman despite calls from many U.S. politicians to impose stiff sanctions on Riyadh.
U.S. special representative for Iran Brian Hook met Falih in Vienna this week, in an unprecedented development ahead of an OPEC meeting. Saudi Arabia first denied the Hook-Falih discussion took place but later confirmed it.
“U.S. political pressure is clearly a dominant factor at this OPEC meeting, limiting the scope of Saudi actions to rebalance the market,” said Gary Ross, chief executive of Black Gold Investors and a veteran OPEC watcher.