Iran's oil minister has walked out of a key meeting with OPEC peers, as a rift deepened with regional rival Saudi over its push...

Iran's oil minister has walked out of a key meeting with OPEC peers, as a rift deepened with regional rival Saudi over its push to ramp up the cartel's oil output. "I do not think we can reach an agreement," Bijan Namdar Zanganeh told reporters at his Vienna hotel yesterday after storming out of talks with a group of ministers on the eve of a crucial OPEC meeting.

Iranian Oil Minister Bijan Namdar Zanganeh

The talks were meant to lay the groundwork for today's gathering of the 14-nation Organisation of Petroleum Exporting Countries (OPEC) when the cartel will discuss easing a supply-cut deal with 10 partner countries that have cleared a global oil supply glut and pushed crude prices to multi-year highs. The output curbs have been in place since January 2017 but Saudi Arabia, backed by non-member Russia, is now pushing to raise production again in order to meet growing demand in the second half of 2018.

But the proposal has run into resistance from Iran, Iraq, and Venezuela, who would struggle to immediately raise output and fear losing market share and revenues if other countries open the spigots. Iran is particularly vocal about its objections as it braces for the impact of fresh US sanctions on its oil exports after President Donald Trump quit the international nuclear agreement. But Riyadh, which cheered Washington's exit from the nuclear pact, is under pressure from Trump to boost output in order to lower oil prices ahead of November's midterm elections.

Saudi Energy Minister Khalid al-Falih

Saudi Energy Minister Khalid al-Falih had earlier signaled a compromise could be in the works. He acknowledged that a big production hike might be "politically unacceptable" to some OPEC countries and said it was important to be "sensitive" to those concerns. The 24 nations in the pact, known as OPEC+, initially agreed to trim production by 1.8 million barrels a day but they have actually been keeping more than two million bpd off the market.

Observers believe a face-saving deal could be brokered if members simply stopped over-complying with the current pact, and agreed to stick to the original reduction quotas -- which would bring several hundred thousand more barrels to the market each day. But that is easier said than done since much of the shortfall has come from Venezuela, where an economic crisis has savaged the nation's petroleum production. Output has also plummeted in Libya, where fighting between rival factions has damaged key oil infrastructure.