VIENNA: Opec ministers met Wednesday to try to work out a deal to tackle rising oil supplies that are weighing heavily on crude prices and the cartel’s revenues.

“All the experts in the markets believe that we have an oversupply on the market and next year we will have more oversupply,” Iran’s Oil Minister Bijan Namdar Zanganeh said, ahead of a pivotal Opec policy meeting in Vienna on Thursday.

Oil prices tumbled Tuesday, with the US benchmark hitting a four-year low on expectations that the Organisation of Petroleum Exporting Countries (Opec) will not agree to cut its official output ceiling.

But there were signs Wednesday that it was working towards some sort of deal on output.

Thursday’s meeting of Opec is the most significant in recent years after crude futures have sunk by more than 30 per cent since June on plentiful oil supplies, a strong dollar and worries about stalling energy demand in a weak global economy.

The 12-nation cartel, which pumps out about one-third of the world’s oil, is under pressure from its poorer members like Venezuela and Ecuador to cut output as tumbling prices have slashed their precious revenues.

However, the cartel’s Gulf members, led by kingpin Saudi Arabia, have rejected calls for a cut unless they are guaranteed market share in the highly competitive arena.

“It is very important for us to have unity inside Opec,” Zanganeh told reporters after “a very good discussion” with Saudi oil minister Ali al-Naimi in the Austrian capital Wednesday.

“We didn’t discuss only about the (possible) cut, but (also) the market situation and our positions are close to each other,” the Iranian added.

Opec seeks outside help: Zanganeh added that it was not solely up to Opec to tackle the oversupply that is sending crude prices crashing, benefitting consumers at the petrol pumps but hurting oil companies’ incomes.

“To deal with this situation we need to have a contribution from non-Opec producers for managing the market,” he said on arrival in Vienna, where the cartel is headquartered.

Ahead of the Opec meeting, the world’s top oil producer Saudi Arabia has cut charges for US customers, in a move seen as a bid to maintain its market share amid increasing competition from oil extracted from shale rock in the United States.

Officials from Saudi Arabia met with their counterparts from Venezuela and non-Opec oil producers Russia and Mexico in Vienna on Tuesday.

Following the surprise gathering, Russian oil giant Rosneft said it had trimmed its daily output by 25,000 barrels because of “market conditions”.

The token reduction represented less than one per cent of the behemoth’s total and did nothing to boost energy prices on depressed global commodity markets.

The key US oil futures contract, West Texas Intermediate (WTI) for delivery in January, was down 30 cents at $73.79 a barrel in trading Wednesday.

Published in Dawn, November 27th , 2014