© Reuters. FILE PHOTO: The logo of the Organization of the Petroleum Exporting Countries (OPEC) can be seen at its headquarters in Vienna.
By Rania El Gamal and Ahmad Ghaddar
VIENNA (Reuters) – OPEC and its allies are expected to expand supply restrictions in the next week, at least until late 2019, when Iraq joins Saudi Arabia and on Sunday Russia advocated a policy aimed at bolstering crude oil prices in a weakening global economy.
Iran is the only major OPEC nation yet to have talked publicly about the need for an expansion of production cuts. In the past, Tehran has objected to the policy of arch-rival Saudi Arabia, claiming that Riyadh is too close to Washington.
The United States is neither a member of OPEC nor participates in the supply pact. Washington called on Riyadh to pump more oil to compensate for lower exports from Iran after Tehran was re-sanctioned for its nuclear program.
OPEC and its Russia-led allies have reduced oil production since 201
Fears of weaker global demand following a US-China outbreak have aggravated the challenges facing the 14-member country Organization of Petroleum Exporting Countries in recent months.
Russian President Vladimir Putin said on Saturday that he had agreed with Saudi Arabia that existing production cuts would decrease by 1.2 million barrels per day or 1.2% of global demand by six to nine months by December 2019 or March 2020 to extend.
Saudi State Energy Minister Khalid al-Falih said the deal would most likely be extended by nine months and no deeper reductions would be needed.
"It's a rash and it happens," Falih, whose country is de facto the leader of OPEC, told reporters.
Warren Patterson, head of commodities strategy at Dutch bank ING, said OPEC has more to lose if it does not renew the deal.
"It's mainly due to the tax break-even oil prices – the Saudis have a break-even price of around $ 85 a barrel, so they are concerned about a potentially widening gap between that level and the place where the market is acting, "he said.
The benchmark has risen more than 25% since the beginning of 2019 to $ 65 per barrel. But prices could falter as sl Due to the global economy, demand is slipping and US oil is flooding the market, as a Reuters survey among analysts revealed.
GEOPOLITICAL RISK HEAVY
The Production Cut-Off Pact expires on Sunday. OPEC meets in Vienna on Monday, followed by talks with Russia and other allies, a group known as OPEC +.
Iraqi Oil Minister Thamer Ghadhban said Sunday he expects the treaty to be extended by six to nine months.
] "The position of Iraq is positive, addressing the reality of the challenges of the oil market and supporting all (efforts) in the context of balancing oil supply and demand," Ghadhban said.
Iraq has overtaken Iran as OPEC's second-largest oil producer and its exports have increased due to investments by Western majors.
Iran's exports dropped to 0.3 million barrels a day in June after new sanctions were imposed on Washington in April 2018.
] Sanctions are putting Iran under unprecedented pressure. Even in 2012, when the European Union sanctioned Tehran, its exports totaled around 1 million Bpd. Oil made up the lion's share of Iran's budget revenue.  9004] Washington has said it wants to change what it calls the "corrupt" regime in Tehran. Iran has condemned the sanctions as illegal and says the White House is run by "mentally retarded" people.
Iranian Oil Minister Bijan Zanganeh has not talked about the OPEC meeting in recent days. He is expected in Vienna on Monday.
"Increased tensions between the US and Iran increase the potential for oil price fluctuations, which could be difficult for OPEC members to deal with," said Ann-Louise Hittle, vice president of macro oils, at Wood Mackenzie.
"Geopolitical risk means that supply prospects are exacerbating and compensating for the previous moderate slowdown in oil demand growth this year," she added.