Tehran/Vienna: Opec has reached an agreement in principle to boost oil production, achieving a last-minute compromise that overcame Iran’s threats to veto any supply hike.

The preliminary accord allows for an additional 600,000 barrels a day of oil to flow onto the market, about 0.5 per cent of global supply, said a delegate. That reflects a 1 million barrel-a-day adjustment on paper to the production cuts implemented by the Organisation of Petroleum Exporting Countries and its allies, the delegate said, asking not to be named because the information is private. The actual increase will be smaller because several members are unable to raise output.

The new deal would effectively roll back the deeper-than-intended cuts from nations such as Venezuela, returning the curbs back to the level originally agreed in 2016, the delegate said. The communique set to be published at the end of the meeting will omit specific production numbers and instead focus on restoring 100 per cent compliance with pledged cuts, the delegate said.

The accord is a much-needed show of unity after Iranian Oil Minister Bijan Namdar Zanganeh walked out of a meeting on Thursday evening, predicting that Opec wouldn’t be able to convince him to back an increase. Zanganeh met with his Saudi counterpart for private talks on Friday morning before the full Opec meeting.

Unilateral withdrawal

Iran had bridled at complaints on Twitter by US President Donald Trump that the cartel was artificially inflating oil prices, which touched $80 (Dh294) a barrel last month. Zanganeh has said the president is to blame for high prices because of his unilateral withdrawal from the international nuclear agreement and the imposition of fresh sanctions that could significantly curb Iran’s crude exports.

Opec and its allies exceeded their pledged 1.8 million barrels a day of production cuts by 47 per cent last month. Those additional supply losses have been largely unintentional, reflecting the collapse in Venezuela’s oil industry and long-term declines in Mexican output.

Saudi Arabia has enough spare capacity to offset those losses and keep a lid on prices, but Energy Minister Khalid Al-Falih acknowledged on Thursday that such a move isn’t politically palatable for his fellow Opec members. The kingdom also wants to preserve the hard-won unity in the group of 24 oil producers that signed up to the original deal.

By the end of summer, additional crude should be flowing into the market, Al Falih said before meeting fellow Opec ministers on Friday.