BAGHDAD: OPEC officials are struggling to reach a final agreement on how to share out production cuts implied by the preliminary output accord agreed by ministers in September. In theory, all OPEC members would benefit in absolute terms if an output cut produced even a modest and sustained rise in oil prices, so there are strong financial incentives for a deal. But all members are acutely aware an agreement is about more than just a short-term boost to export earnings and has implications for the future regional power structure in the Gulf, which makes a deal harder.
Saudi Arabia will not accept any diminution of its dominant role as the world’s largest oil exporter and the major financial power in the Gulf region. By contrast, Iran and Iraq do not want to cement Saudi hegemony. The political implications for the regional power structure caused the last attempt to negotiate a production deal to fall apart in Doha in April, when it was vetoed by the Saudi royal court, and could yet do so again.
