Exclusive: OPEC and its allies view oil production as an Iranian lash – source

Algiers (Reuters) – OPEC and other oil producers discuss the possibility of increasing production by 500,000 barrels per day (bpd) to counter the decline in Iran's supply due to US sanctions, said Reuters a source close to the discussions.

The development took place as oil reached $ 80 a barrel this month, prompting US President Donald Trump to reiterate his call to the Organization of the Petroleum Exporting Countries (OPEC) to lower prices .

The OPEC, Russia and other allies agreed late 2016 of an agreement to reduce the supply, but after months of reduction more than the pact they agreed in June to boost production by returning to 100%. This equates to an increase of about 1 million bpd.

The ongoing talks are not finalized, but that would mean that oil producers should reduce compliance to less than 100 percent, the source said Friday.

Benchmark Brent LCoC1 oil prices fell by more than $ 1 following a potential increase in production, falling below $ 79 per barrel.

OPEC and its non-OPEC allies will meet in Algeria over the weekend to discuss compliance with existing cuts.

Three sources from OPEC and other non-OPEC sources told Reuters on Friday that the latest data show that OPEC and its allies supplied less oil to world markets in August than in July, mainly because of the decline in Iranian production.

In July, OPEC producers and non-OPEC countries cut their production by 9% more than expected in their pact. The August Cup was even higher, said the three sources without providing exact figures, which will be discussed in Algiers this weekend.

OPEC sources said any official action to increase production would require OPEC to hold an extraordinary meeting – a proposal that is not yet on the table.

However, the joint ministerial committee of OPEC and non-OPEC countries, known as JMMC, which meets on Sunday, may still recommend an increase in production if needed, sources said.

"There are discussions to increase production by another 500,000 bpd. They (OPEC and non-OPEC countries) can increase their output when they meet in December, "the source said in reference to the next official meeting of the UNECE. OPEC, scheduled for December 3.

Deception increases the pressure

On Thursday, President Trump tied US support to Middle Eastern countries at oil prices, while urging OPEC to lower prices.

"We are protecting the countries of the Middle East, they would not be safe for long without us, and yet they continue to push for ever higher oil prices! We will remember. The monopoly of OPEC must bring down prices now! , Writes Trump on Twitter.

OPEC's decision in July to increase oil production also followed a series of Trump tweets.

Rising gasoline prices in the United States could create a political problem for Trump ahead of the November parliamentary elections by offsetting Republican claims that its tax cuts and reductions in federal regulations have contributed to stimulate the US economy.

Iran, the third OPEC producer behind Saudi Arabia and Iraq, has pledged to block any increase in supply. Tehran said the price rally was initiated by Trump himself when he decided to impose additional sanctions on Iranian oil sales.

He also accused Saudi Arabia of discrediting OPEC by following the instructions of the United States, which is not part of the group. Iran's oil minister, Bijan Zanganeh, does not intend to attend the Algiers meeting.

All OPEC production policy decisions must, in theory, be 100% approved by its members.