Iran against any increase in OPEC oil output

Posted June 23, 2018

Iranian OIl Minister Bijan Zanganeh's exit from a meeting in Vienna on June 21 threw into question whether Russian Federation and the OPEC oil cartel will be able to reach agreement on their proposed 1 million-barrel-a-day production increase, the first such rise since the group agreed to freeze production in 2016.

OPEC, he said, "is not an organization to receive the instruction from President Trump and follow it".

"Iran rejected a potential compromise, saying it won't support even a small increase in oil production".

Zanganeh, speaking to reporters on the sidelines of a Vienna seminar earlier this week, accused Trump of trying to politicize OPEC and said it was U.S. sanctions on Iran and Venezuela that had helped push up prices.

Reuters reported that the reinstitution of us sanctions in November could cut Iran's oil output of almost 4 million barrels a day by a third.

As reported by Reuters, the worldwide benchmark for oil prices Brent crude was at US$73.88 per barrel at 0144 GMT, up 1.1 per cent from their last closure.

"Of course we will have an agreement" at the meeting on Friday, Saudi Energy Minister Khalid Al-Falih tells reporters in his first comments since arriving in Vienna. Big oil consuming nations such as India have been calling on the producers to pump more barrels following a sharp rise in prices. The global benchmark, Brent, was at $74.19 a barrel on Friday.

Oil ministers from OPEC and its allies have arrived in Vienna for what promises to be one of the cartel's most contentious meetings in years as Iran opposes proposals to boost production. He acknowledged not all of the cartel's members could increase output, in a reference to countries such as Venezuela.

That means the country has little to gain from a deal to raise OPEC output, unlike top oil exporter Saudi Arabia.

The correction in prices have been a continuing trend since May 23, when prices breached the $80 mark after the announcement of new U.S. sanctions on Iran and ongoing supply disruptions in Libya and Venezuela.

"There is a lot more at stake than just ticking a box and say: 'we got this out of the way", the minister said, nothing that "timing isn't critical for the government of Saudi Arabia".

Three Opec sources said ministers would debate on Thursday whether to raise supplies by 1 million bpd as the main proposal for the meetings of Opec and its allies on Friday and Saturday.

Some analysts believe that Saudi Arabia needs a Brent price closer to $90 to cover its domestic spending but is feeling pressure from the United States to head off rising prices by boosting output.

Yergin said Saudi Arabia and the United Arab Emirates support the current, tougher USA policy toward Iran, Saudi Arabia's rival for influence in the region.

Falih said the world could face a supply deficit of up to 1.8 million bpd in the second half of 2018 and that OPEC's responsibility was to address consumers' worries.