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Oil production could rise as Saudi and Iran clash

November 4, 2016 at 7:01 pm

Disputes between Saudi Arabia and rival Iran resurfaced at a meeting of OPEC experts last week, with Riyadh saying it could raise oil output steeply to bring prices down if Tehran refuses to limit its supply.

Clashes between the two OPEC heavyweights, which are fighting proxy wars in Syria and Yemen, have become frequent in recent years.

Tensions subsided, however, in recent months after Saudi Arabia agreed to support a global oil supply limiting pact, thus raising the prospect that OPEC would take steps to boost oil prices.

However, a meeting of OPEC experts last week, designed to work out details of cuts for the next OPEC ministerial gathering on 30 November, saw Saudis and Iranians clashing again, reported Reuters.

OPEC sources have said that the Saudis have threatened to raise their production to 11 million barrels per day and even 12 million bpd in order to bring oil prices down.

Saudi Arabia has increased output since 2014 to record highs of around 10.5 million-10.7 million barrels per day and adding extra supply would only worsen the global glut, which has already seen prices more than halving from $115 a barrel seen in mid-2014.