ALGIERS, Nov 27: Opec President Chakib Khelil said on Tuesday the oil cartel could hike output to exert pressure on rival exporters, if they fail to agree joint action to curb oversupply in world markets.

The Organization of the Petroleum Exporting Countries is seeking a cut of 500,000 barrels per day (bpd) by rival exporters including Russia, Mexico and Norway in order to trigger a 1.5 million bpd cut of its own.

“If we don’t cut production by 1.5 million barrels per day in January, it is clear that prices will collapse quickly and we can add production as well to exert additional pressure,” Khelil told reporters at a forum organized by Algerian state-owned newspaper El-Moudjahid.

The 11-member cartel has previously said it would not pressure non-Opec with output hikes because cuts should be a sovereign decision by independent exporters based on national interest.

Mexico, Norway and Oman have all agreed substantial cuts in line with Opec’s demands, but world number two exporter Russia has offered only a token reduction.

Khelil said the oil market situation in the second quarter of next year would be “catastrophic” without a big cut, and prices could slide further to $10 per barrel.

“It is neither in the interest of Russia or other countries in Opec and non-Opec that prices collapse,” Khelil said.

Opec believes anything less than a two million bpd cut next year will not have the desired effect as the global recession gathers pace.—Reuters