Iran Fears OPEC’s Death and Favors Oil Cut Extensions
The oil minister of Iran, Bijan Zanganeh, said that he would support prolonging output cuts by six to nine months. Tehran is currently the third largest producer in the Organization of Petroleum Exporting Countries.
Zanganeh also warns Russia and Saudi Arabia about “unilateralism” and its potential threat to lead OPEC to death, saying that Moscow and Riyadh had already agreed to extend supply cuts for the following months.
The oil minister told reporters that it is important that “…OPEC remains OPEC…”, and that the organization has lost its authority because agreements have already been made even before the meeting in Vienna.
The relationship of Saudi Arabia and Iran could complicate the meeting. Tehran has accused its rival, Riyadh, for being too close with the United States. Saudi Arabia on the other hand has blamed Iran to be the head behind the attacks on oil tankers near the Strait of Hormuz.
Nonetheless, both countries appear to be in favor of an extension, as Tehran wants to preserve its market shares.
Members of OPEC are set to meet this Monday in Vienna, Austria. Then on Tuesday, the OPEC members are scheduled to have another meeting with its allies (or OPEC+) regarding on the agreements and points made.
OPEC and its allies have been cutting oil outputs since 2017 to prevent prices in from sliding due to surging production from the United States.
The United States has become the world’s biggest producer of oil and petroleum this year, topping Russia and Saudi Arabia. However, Washington is not part of OPEC and will not take part in the meeting.
The US has ordered Saudi Arabia, the de facto leader of OPEC, to pump more oil to compensate Iran’s lowering exports. Tehran has lowered their exports after Washington imposed sanctions over their nuclear program.
Saudi Arabia has argued on Sunday that the demand for oil is still enough, but admits that it “… is softening a little bit…”
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