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Iraq urges extension of OPEC oil deal for another nine months

  • Iraq is pushing hard for a 9-month extension to the oil supply cap
  • The UAE says everyone is working on a deal but a consensus is not yet there.
  • Russia is viewed as a potential sticking point to an OPEC supply cap extension

The Iraqi oil minister has repeated his call for an extension to a cap on global oil supplies and added that the deal would not need any mid-term review.

OPEC and countries outside the cartel, such as Russia, will meet in Vienna Thursday to consider whether an existing curb on supply, should be extended by nine months.

The current agreement runs out at the end of March and Jabar al-Luaibi, Iraq's oil minister, said Wednesday that any mid-stream review was unnecessary.

"No, no. The existing declaration (will) finish at the end of March. So we extend this another nine months, so that means it will end by the end of 2018," said Al-Luaibi.

Al-Luaibi added that while he was happy with the current price of oil he was also keen it didn't encourage others to overproduce.

"We are happy with $60, maybe a little bit more than $60, but we have to be careful about the effect on the other side of the river," the minister said.

The price of oil collapsed from near $120 a barrel in June 2014 due to weak demand, a strong dollar and booming U.S. shale production. OPEC's reluctance to cut output was also seen as a key reason behind the fall. But, the oil cartel soon moved to curb production — along with other oil-producing nations — in late 2016. The oil exporters then extended that agreement through to March 2018.

Following Al-Luaibi comments, the energy minister for the United Arab Emirates, also speaking in Vienna, dismissed the idea that the Iraqi viewpoint meant an agreement had been reached.

There are concerns that Russia could up-end plans to extend a deal to increase output cuts due to domestic pressures. But Suhail al Mazroui, United Arab Emirates oil minister, told CNBC Wednesday that all the participating countries were making every effort to strike a deal, including Russia.

"Every country has a voice and every country needs to agree. OPEC is a consensus," he said.

"It is not (just so) a country could be blocking a decision. Therefore we need to wait for the meeting. And I am optimistic," he added.