Iraq also remains one of the countries that could still raise production levels, says the energy analyst, highlighting the speed with which the Iraqi prime minister weakened Saudi Arabia’s and Iran’s declaration last week that they would back a nine-month extension to the existing agreement. Iraqi Prime Minister Haider al-Abadi said that he would back an extension but refused to commit for a determined period of time.
Saudi Oil Minister Khalid al-Falih is in Baghdad today to discuss the potential extension following his Iraqi counterpart’s recent comments that he would support only a six-month extension.
Turning to oil prices which have been steadily moving higher since the start of the month on the back of speculation that the deal will be renewed and were sitting at above $50 per barrel in early trade on Monday, Croft says that she expects them to grind higher still.
However, having released the news about supporting a nine-month extension a good ten days prior to the OPEC meeting, Saudi Arabia and Iran have potentially put paid to a potential further jump in the price unless they pull another rabbit out of the hat, she adds.
“If you want a price rise they’re probably going to have to go deeper. Do you roll over 1.8 million barrels or do you throw in another 500,000? That’s how you’d move in significantly higher coming out of OPEC,” Croft opined.
