How an Opec deal could work
Iran’s demands can be accommodated with some adjustments of the numbers
Getting Opec’s fractious members to agree on cuts has always been difficult: herding cats is easier. But the geopolitical rivalry between Saudi Arabia and Iran, enemies in proxy conflicts from Yemen to Syria, makes the negotiations underway now even harder. Iran is under less pressure than Saudi Arabia. The kingdom’s economy is suffering, while its rival enjoys a post-sanctions recovery. One equation sums up their different stances in negotiations about whether to cut output to support prices. Say Saudi Arabia slashes 0.5m barrels a day from its output – the idea it has floated – to 10.1m b/d, and gains a $5-a-barrel lift in the oil price, from $46 to $51/b. Its daily income rises by about $
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