Saudi Arabia has set a high bar for any oil supply deal ahead of Wednesday’s Opec meeting in Vienna, as it attempts to put pressure on Iran and Iraq to accept a larger share of output cuts.

The oil production cartel is trying to reach an agreement to curb supplies for the first time since the financial crisis and put an end to a two-year downturn in crude prices.

Saudi Arabia, the group’s de facto leader, has offered to cut 4.5 per cent from its production levels of about 10.5m b/d in October, according to two people familiar with its thinking.

But, in turn, Iran must freeze its production at about 3.8m b/d, while all members must accept the use of third-party production figures published by Opec, the people said. On top of that there must also be participation from producers outside the group, such as Russia.

Iran, however, argues that only those countries that have increased production over the past two years, Saudi Arabia and its Gulf allies, should cut back now.

Saudi Arabia’s hardline stance risks a further drop in prices, which traders have warned could fall by almost a quarter should a deal to curb output not materialise after nine months of talks between the 14-member cartel.

“If Opec does not come up with a credible agreement to cut production on Wednesday, oil prices will end the year below $40 and be chasing down $30 early next year,” said David Hufton of PVM, a London-based oil brokerage.

Mr Hufton’s view echoed that of Torbjorn Tornqvist, chief executive of oil trader Gunvor Group, who told the Financial Times that prices could drop by $10 a barrel without a deal.

Brent crude oil, the international marker, rebounded from an early drop on Monday and rose $1.14 to $48.38 a barrel as Opec scrambled to salvage a deal.

The Algerian and Venezuelan oil ministers flew to Moscow on Monday in a final attempt to persuade Russia to take part in the cuts.

At the same time, technical experts started another round of talks in Vienna to try to agree how much each member should cut.

How the production curbs will be distributed has dragged out between Opec members with no concrete agreement yet reached. An output target of 32.5m b/d would require a supply cut of 1.3m b/d.

Iran, which is recovering from years of western sanctions, believes that the Algiers accord laid out the case for the country to be exempt from any production deal in the same manner as conflict-ridden Nigeria and Libya. It is targeting production of at least 4m b/d.

“Saudis seem to have reneged on earlier promises,” Iran said through its state-news agency Mehr on Sunday.

Iraq, meanwhile, has reluctantly said that it will be part of any deal, but it has disputed the underlying figures from which any output curbs will be calculated

While some analysts see the tough Saudi line as brinkmanship ahead of the meeting, it has appeared less desperate to clinch a deal in recent days.

“The market will reach balance in 2017 even if there is no intervention by Opec,” said Khalid Al Falih, Saudi Arabia’s energy minister, on Sunday, flagging the possibility of leaving Vienna without a deal. “I think maintaining production at current levels is justifiable.”

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