VIENNA—Acknowledging their inability to push up oil prices, OPEC nations yesterday effectively scrapped their official output ceiling and agreed to keep producing well above that level.
An attempt to nudge the cost of oil higher would have involved lowering output, thereby reducing supply and driving demand higher. Instead, the organisation’s decision is likely to push the price of oil further south by endorsing present output, which is more than 1.5 million barrels a day above the formal ceiling of 30 million barrels.
The ministers of the Organisation of the Petroleum Exporting Countries appeared to have little choice. Major producers inside the cartel were opposed to isolated calls of crimping output. Instead, OPEC is poised to produce more oil.
Iran, which once pumped around four million barrels a day and is now down to about half that, is preparing to come back fully on line once it sheds nuclear-related sanctions in a few months.
Iraq is also resurgent. The world’s fastest-growing source of crude this year, it was pumping more than four million barrels a day last month and was responsible for last month’s biggest monthly rise in output among all OPEC countries.
And the ministers agreed to readmit past member Indonesia, to expand their ranks to 13. While that country’s production goes mostly for domestic consumption, that move could also add some to the total amount of OPEC barrels on sale.
A final statement on the meeting was unusual in not mentioning any decision on production ceilings. But conference president Emmanuel Ibe Kachikwu told reporters that there was agreement to maintain “current actual production” that is well above the last formal ceiling set at 30 million barrels a day. (AP)