UPDATE 1-Kuwait says supports any OPEC+ supply decision as 2021 curbs loom

(Updates with Kuwait statement, changes throughout)
By Rania El Gamal, Ahmed Rasheed and Alex Lawler
DUBAI/BAGHDAD/LONDON, Oct 29 (Reuters) - Kuwait said on
Thursday it would support any decision made by OPEC and its
allies on future oil supply policy after OPEC and industry
sources told Reuters some producers would prefer to pump more
from January rather than extend output curbs.
De-facto OPEC leader Saudi Arabia and non-OPEC Russia are in
favour of extending existing oil production cuts of around 7.7
million barrels per day (bpd) into next year. They want to
maintain cuts because fuel demand worldwide remains depressed
due to the coronavirus pandemic's impact on population movement
and economic activity.
Extending existing curbs would mark a change from the
existing pact between the Organization of the Petroleum
Exporting Countries (OPEC) and allies, a group known as OPEC+.
The producers had previously agreed to raise output by 2 million
bpd in January.
"Kuwait fully supports the joint OPEC+ efforts to restore
balance to the oil market, and going forward we will also
support whatever necessary joint decisions will be agreed to
under the OPEC+ framework," Kuwaiti Oil Minister Khaled
al-Fadhel said in a report published by state news agency KUNA.
OPEC and industry sources briefed on the matter had earlier
told Reuters that Kuwait, the United Arab Emirates and Iraq
would like to find ways to increase supply by reviewing their
output targets.
OPEC+ next meets in November to decide on production policy.
Debate about targets and how they are calculated would
complicate policy discussions on balancing supply with weak
demand.
The UAE and Kuwait typically support Riyadh's position, but
both believed their output cut targets against their capacity
were too deep to sustain into 2021, the sources said. Both have
made big investments in boosting capacity.
"The countries are being suffocated with those cuts, it is
very tough to continue with them next year too," said one OPEC
source.
The UAE is finding the cuts challenging because of its deals
with international oil companies. When the country cuts, foreign
oil companies have to contribute.
The UAE is cutting around 33% of its output potential,
pumping 2.59 million bpd, down from around 3.9 million bpd in
April before the deal, according to OPEC data.
The UAE had pumped more than its target in August but
pledged to compensate for the rise by reducing its oil supply in
the coming months. Kuwait's production cap is at 2.297 million bpd after it had
boosted its output to around 3.1 million bpd before the deal,
meaning it is cutting about 26% of its output capacity, the data
shows.
Iraq, OPEC's second largest producer, is required to cut
about 850,000 bpd. Baghdad, which needs oil revenue to rebuild
after years of war and sectarian violence, has previously raised
the possibility in talks with OPEC+ of exemption from the
reductions next year, sources said. "Iraq will stay committed to OPEC+ cut deal and we will keep
respecting our pledge, not only to cut production but also to
compensate for the missing months until end year," said a senior
Iraqi oil official who attends OPEC meetings.
"But, and here we have a big but, when OPEC will meet again
to discuss 2021 plans it will be difficult for Iraq keep cutting
output and exports with the same agreed share in 2020 because we
are suffering a financial crisis which threatens the possible
collapse of the Iraqi economy," said the official.
"All OPEC members must understand Iraq's critical
situation... when it comes to discuss a new cut extension deal."
Iraq has failed to comply with its output targets but its
compliance has been improving as it agreed to compensate for
earlier overproduction by December.
"For the rollover to work, I think the baselines and quotas
need to be looked at again... when the name of the game is to
produce and maximise your gains,” one source from an OPEC
producing country said.

(Editing by Marguerita Choy and Simon Webb)