OPEC and partners face steep challenge to reach oil cut deal
Vienna, Dec 7 : OPEC will meet with 10 partner countries, including Russia, on Friday to try to thrash out an agreement on oil production cuts, a day after the group's members failed to reach a deal.
The oil cartel had been expected to sign off on cuts to stem a plunge in oil prices at a meeting on Thursday, but it broke up without an accord.
"No, I am not confident" about the chances of a deal, Saudi oil minister Khalid Al-Falih told reporters after a long day of negotiations at OPEC's headquarters in Vienna.
However, OPEC and its non-cartel members -- who account for around half of global output -- agree on one thing: a glut on the market has led to oil prices falling by more than 30 per cent in the space of two months.
However, the major players among the oil giants all have their own reasons to look to others to act.
For Russia, which leads the non-member countries in the so-called OPEC+ alliance, "it's much more difficult to cut than for other countries, because of our climatic conditions," Russian Energy Minister Alexander Novak said on Thursday in Saint Petersburg.
Saudi Arabia, meanwhile, has to bear in mind pressure from the US, after President Donald Trump demanded in a tweet on Wednesday that OPEC not boost prices.
In addition, the kingdom's diplomatic position has been weakened by the furore over the killing of journalist Jamal Khashoggi.
Though al-Falih insisted that "we don't need permission from anyone to cut" production, the figure of a million barrels put forward by Saudi Arabia was lower than the reduction expected by the markets.
Iran, Saudi Arabia's geopolitical rival and OPEC's third-largest producer, suggested it was in favour of deeper cuts -- while asking to be exempted from them because of the effects of US sanctions targeting its oil sector.
The thorny question of exemptions, which will also be sought by Venezuela and Libya according to the Bloomberg news agency, could be crucial for Friday's talks.
The amount and the timetable of any cuts imposed by Russia will also be a key sticking point.
Iraqi oil minister Thamir Abbas Al Ghadhban said he was still "hopeful" an agreement could be reached during talks on Friday. However, markets displayed doubts with fresh falls in oil prices sparking a sell-off of stocks by investors.
The price of a barrel of Brent, the European benchmark, sank below the symbolic USD 60 mark because the reduction of around one million barrels floated by Saudi Arabia was below what markets had been expecting.
Analysts say that the details of any agreement will be key in determining what happens next to prices.
"If it's one million (barrels) excluding Iran, then it's in fact 1.2, 1.3, which should be supportive of price," Abhishek Deshpande, an oil analyst at JP Morgan, told AFP.
This would be because the markets would price in the drop in Iran's production expected due to sanctions.
"But if (the agreement) is including Iran, that's not enough," Deshpande added.
In June, OPEC and its partners agreed to allow for a boost in production by Saudi Arabia and Russia to compensate for the expected losses in production from Iran after the US dramatically withdrew from the Iran nuclear deal in May and vowed to re-impose sanctions.
However, the US then granted temporary waivers to eight allies to allow them to carry on importing Iranian oil, contributing to a plunge in oil prices which wiped out the gains seen since early 2017.
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Criticism of PM Modi, repeated mentions of guarantees to be highlights of K’taka Budget: LoP Ashoka
Bengaluru (PTI): Leader of Opposition in the Karnataka Assembly R Ashoka on Thursday took a dig at CM Siddaramaiah ahead of the state Budget presentation, claiming that the government is expected to borrow Rs 1.15 lakh crore and is likely to impose fresh taxes on the people.
He said the Budget would have nothing new, adding that its highlights would be criticism of Prime Minister Narendra Modi and repeated mentions of the five guarantee schemes ('Shakti', 'Gruha Lakshmi', 'Gruha Jyoti, 'Yuva Nidhi' and 'Anna Bhagya').
Chief Minister Siddaramaiah, who also holds the Finance portfolio, is scheduled to present the 2026–27 Budget on March 6. This will be his record 17th budget.
“Siddaramaiah-led Congress government’s budget will be presented tomorrow. While Finance Minister Nirmala Sitharaman reduced the tax burden in the Union Budget, Siddaramaiah is known for imposing taxes on people. He imposes about four taxes a month and has already introduced 36 taxes, and is now looking for ways to impose more,” Ashoka said.
Speaking to reporters, he said the Congress had promised people before coming to power that the guarantee schemes would be implemented without imposing any burden on them.
“By the end of the chief minister’s term, the state’s total debt will probably exceed Rs 6 lakh crore. The government has already breached financial discipline. Siddaramaiah and his government are somehow managing the situation,” Ashoka claimed, adding that his borrowings as CM equal those of 12 or 13 former chief ministers combined.
Stating that the Budget should create higher revenue sources, ensure that no burden is placed on people, and take the state away from debt, the opposition leader said this could be ensured only by a “clever and intelligent finance minister.”
“Anyone can run a government by pushing the state into debt,” he said, accusing Siddaramaiah of “increasing the state’s debt and failing to meet the expectations of the people.”
Highlighting that Siddaramaiah blames the previous BJP government for everything, Ashoka said Basavaraj Bommai, the chief minister during the previous BJP government, had presented a “surplus budget,” without excessive borrowings.
“Despite having the opportunity to borrow more while staying within the parameters of financial discipline, he (Bommai) did not do so, as it would burden the people,” he said, accusing Siddaramaiah of borrowing crores of rupees every year.
“I feel that this time too, he will take a loan of Rs 1.15 lakh crore,” he claimed.
The BJP leader said he had written to the CM requesting an allocation of Rs 15,000 crore annually for the development of backward taluks, as recommended by the High Power Committee on Redressal of Regional Imbalance (HPCRRI), chaired by economist Prof M Govinda Rao.
Claiming that the government appears “inactive” due to internal rifts, Ashoka pointed to an ongoing power struggle between factions led by Siddaramaiah and Deputy Chief Minister D K Shivakumar over the CM’s post.
“Amid all this, we cannot expect anything new from this Budget. The CM will repeatedly speak about the guarantee schemes and target the central government and PM Modi. Criticising Modi and repeated mentions of the five guarantee schemes will be the highlight of this Budget. Other than that, there will be nothing new,” he added.
He also dismissed the CM's claim that the government had achieved 90 per cent of the promises made in the previous Budget. “The fact is that not even 9 per cent has been achieved. I have evidence for it,” he said.
Ashoka further alleged that the government had also failed in tax collection, achieving only 48 per cent of the target, and had released less than 40 per cent of the allocated funds to some departments.
