Iran may propose that OPEC cut its output target by as much as 1 MMbbl/d when the country’s oil minister consults with his Saudi counterpart before the group gathers this week, Mehr News reported.

Bijan Namdar Zanganeh and Saudi Arabia’s Oil Minister Ali Al-Naimi will talk on the sidelines of the meeting in Vienna of the Organization of Petroleum Exporting Countries, seeking to define a common view among its 12 members for supporting prices, Iran’s state-run Mehr News agency reported, without saying where it got the information. An official in Iran’s oil ministry couldn’t be reached for comment by phone.

OPEC, supplier of about 40% of the world’s oil, will meet Nov. 27 in the Austrian capital to assess its collective output amid a supply glut and a 27% drop in prices this year. Half the analysts in a Bloomberg survey last week forecast that OPEC would cut production to shore up prices, while the other half said they didn’t see it deviating from an official 30 MMbbl/d production target.

A decision by OPEC to decrease output would be “supportive to the market,” Tom James, managing director of consultancy Navitas Resources, said by phone from Dubai. “I’m not sure it would be enough to really push up prices and to get them back into the $90s.”

Prompting Speculation

The drop in Brent crude, with the global benchmark trading at less than $80 a barrel last week, prompted speculation of an OPEC cut. Officials from oil-producing countries stepped up diplomatic visits before the group’s meeting, discussing how to react to the plunge in prices to a four-year low.

Brent fell 0.4% to $80.01 a barrel on the London-based ICE Futures Europe exchange at 1:01 p.m. local time. U.S. West Texas Intermediate has fallen 29% since June 20.

James said he sees the market stabilizing and expects OPEC to refrain from announcing an output reduction this week. The group is more likely to monitor prices and demand into the first quarter of 2015 to determine if a cut is warranted at that time, he said.

OPEC’s former research head Hassan Qabazard said the group probably won’t decide to cut output at this week’s meeting because member countries aren’t willing to lose market share to non-OPEC producers. The oil market may find a new equilibrium as lower prices limit costlier production, Qabazard, now a consultant, said by e-mail today.

Non-OPEC Producers

“OPEC can’t balance the market alone,” former Qatari Oil Minister Abdullah Bin Hamad Al Attiyah said in a Nov. 19 phone interview. “This time, Russia, Norway and Mexico must all come to the table. OPEC can make a cut, but what will happen is that non-OPEC supply will continue to grow. Then what will the market do?”

Oil markets are oversupplied by about 2 MMbbl/d, and global economic growth is below expectations, said Al Attiyah, who participated in OPEC’s policy meetings from 1992 to 2011. While the group had little trouble reaching agreements in past meetings, the situation is different now, he said.

Russia may agree to cut about 300,000 bbl/d of output next year in return for OPEC’s reducing its production by about 1.4 MMbbl/d, Moscow-based newspaper Kommersant reported, citing people close to the government that it didn’t identify. There isn’t a consensus yet for such a proposal, the paper said.

Bilateral Talks

Societe Generale SA sees a 60% chance that OPEC will cut output by 1 MMbbl/d to 1.5 MMbbl/d, the bank said today in an e-mailed report. A decrease in this range could lift Brent prices back to $90 a barrel in 2015 and 2016, it said.

Saudi Arabia, OPEC’s biggest member, remains committed to seeking stable prices, Al-Naimi said Nov. 12 in Mexico. Rafael Ramirez, Venezuela’s OPEC representative, visited Algeria, Qatar, Iran and Russia. Iran’s Zanganeh traveled to the United Arab Emirates, Qatar and Kuwait.

Zanganeh may also meet with Alexander Novak, Russia’s energy minister, in Vienna this week, Mehr reported. Russia, while not an OPEC member, said it will send Novak and Igor Sechin, head of state-controlled OAO Rosneft, the country’s largest crude producer, for meetings with OPEC officials.

The slide in crude prices won’t derail Saudi Arabian Oil Co.’s plans to expand and integrate its refining and chemicals businesses, Chief Executive Officer Khalid Al-Falih said. The company seeks to be the world’s largest refiner over the next decade, he said at a conference in Dubai today.

Nuclear Deadline

Two-thirds of global oil production comes from non-OPEC producers, Suhail Al Mazrouei, the U.A.E.’s energy minister, said in comments on his Twitter account yesterday. Producers, particularly those pumping crude from shale formations, “shall be concerned as we are in OPEC” about stability in crude markets and about finding a sustainable balance between supply and demand, he said.

Saudi Foreign Minister Prince Saud Al-Faisal met Russian Foreign Minister Sergei Lavrov in Moscow Nov. 21, and the countries said in a joint statement they’ll coordinate on “issues” affecting the energy and oil markets, without giving more detail. Saudi Arabia and Russia are the world’s two biggest oil exporters.

International sanctions imposed on Iran over its nuclear program are choking the Persian Gulf nation’s crude shipments. The government in Tehran is negotiating with the U.S. and five other world powers for an agreement to lift the curbs. The countries, which set Nov. 24 as a deadline for an accord, agreed to extend their talks until July 1, according to a diplomat familiar with the negotiations.