Yesterday, reports came out that Saudi Arabia is going to take a hard stance in the Upcoming meeting with the members of the OPEC on November 30th. It is said that Saudi Arabia would offer to cut 4.5 percent of its current production and ask other members to play their part. It would also call on Iran to freeze its production at the current level of 3.8 million barrels per day and ask non-OPEC countries like Russia to join the production cut initiative. In addition to that, OPEC members would have to accept the third party production data used by the OPEC secretariat to do the policing.

So is the demand viable to secure a deal?

As of October, OPEC produced 33.8 million barrels per day and Saudi Arabia produced 10.5 million barrels per day. So bring the level within the range the OPEC members suggested the cartel would have to cut production between 0.8 to 1.3 million barrels per day.

A production cut of 4.5 percent by Saudi Arabia means a reduction 0.472 million barrels per day. So other members will have to cut a minimum of 0.33 million barrels per day. Now, three countries; Iran, Libya, and Nigeria are exempted from the production cut. So the burden of the cut would have to a group of 10 other countries. These 10 countries together produce about 17.4 million barrels of oil per day. To reach the desired level, these countries together would have to cut their production by less than 2 percent.

Hence, a deal is certainly viable. So, it is up to Iran, whether to accept the Saudi Arabia's demand for a production freeze or not, at the current level, which is below its pre-sanction level. It would also have to forgo its desire to attain production share of 13 percent in the OPEC.