(Ecofin Agency) - The Organization of Petroleum Exporting Countries (OPEC) on Wednesday commenced debates on a deal to cut oil production and bolster the crude oil price as Iran and Iraq resists pressure from Saudi Arabia to take part in any action. The members of OPEC began an informal meeting on Wednesday morning and are expected to start a formal gathering at OPEC headquarters later.

While an Iraqi delegate said “there will be an agreement today,” Iranian Oil Minister, Bijan Zanganeh, said he is optimistic, adding there had been no request for Iran to cut output. Iran on Tuesday, wrote to OPEC demanding that Saudi Arabia should cut production by 1 million barrels per day (bpd), according to OPEC sources.

The group made an initial agreement in Algiers in September to cap output at around 32.5 to 33 million bpd as against the current 33.64 million bpd to bolster oil prices. OPEC had made it known that it would exempt Iran, Libya and Nigeria from the agreement, as their output has been affected by unrest and sanctions. But in recent weeks, Saudi Arabia changed its position and decided to cut its output by 0.5 million bpd, while proposing that Iran also cap production at around 3.8 million bpd.

Iraq on the other hand has also been demanding for higher output limits, claiming it needs more money to fight the militant group Islamic State. Iran and Iraq collectively produce more than 8 million bpd, a little behind Saudi Arabia with 10.5 million bpd.

“OPEC members are largely convergent on a need for a production cut. We are optimistic. Certainly consultations have been OK. There’s still a few gray areas we have to patch up, but I like to go in believing that we’re going to reach a deal. The pressure is on everybody equally, every member of OPEC wants some resolution and are looking to both Saudi and Iran to try and find some solution to the issue. So when there isn’t a resolution, it affects not only them but everybody including the outer members of OPEC,” Emmanuel Kachikwu, Nigeria’s Minister of State for Petroleum Resources, told Bloomberg in an interview.

Analysts have said that oil prices will correct sharply if OPEC is not successful in reaching a deal, possibly reaching below $35 per barrel. Brent crude rose by 1.5% on Wednesday to over $47 a barrel.

Anita Fatunji