Zanganeh: OPEC Should Act Unitedly

EghtesadOnline: Members of the Organization of Petroleum Exporting Countries should hold consultations among themselves first on oil policy before striking deals with producers outside the bloc, Oil Minister Bijan Namdar Zanganeh said on Monday before leaving Tehran to attend the 176th meeting of OPEC in Vienna, Austria.

News ID: ۷۴۷۷۴۰

02 July 2019

“Without unanimity among OPEC members, it is meaningless to plan cooperation between OPEC and non-OPEC countries,” the Oil Ministry’s news portal Shana quoted him as saying.

“Iran supports cooperation with non-OPEC states, but as long as some members of OPEC are hostile against other members, like Iran, OPEC’s understanding with non-OPEC states is meaningless and there is no room for cooperation.”

Tehran has in the past objected to policies proposed by Saudi Arabia, saying Riyadh was prioritizing the interests of the United States over those of OPEC members, according to Financial Tribune.

The United States is not a member of OPEC, nor is it participating in the supply pact. Washington has demanded Riyadh pump more oil to compensate for lower exports from Iran after reimposing fresh sanctions on Tehran.

US President Donald Trump abandoned a nuclear pact that six world powers signed with Tehran in 2015 and sanctioned Iran’s oil and bank sectors last year. Last month, the United States announced new sanctions on Iran's petrochemical sector.

At the previous OPEC meeting, 14 members of the organization and their allies decided to reduce their crude oil output by 1.2 million barrels per day to restore prices and balance the market for a six-month period, which decision was implemented on Jan. 1, 2019.

Threat to OPEC

Upon arriving in Vienna, Zanganeh told reporters that he had no problem with prolonging the output cut by OPEC, but scorned "unilateralism" among some members of the producer group.

"It hasn't been OPEC’s norm that two people decide outside OPEC and then the organization approves the decision. This is the biggest threat to OPEC,” he said.

His comments came after Russian President Vladimir Putin said at the weekend that Russia had agreed with Saudi Arabia to extend by six to nine months a deal with OPEC on reducing oil output.

“If OPEC wants to survive, it should decide inside OPEC not to receive instructions from outside. We are not here to stamp decisions made outside the organization,” Iran’s oil minister said.

“We want to live in a peaceful environment, but the US and some neighboring countries in the Persian Gulf want to put pressure on us. It’s very unfair because we have no problem with the international agreement that we have signed. The US has jeopardized the deal and we want all the international powers [that signed the deal] to comply with the agreement.”

Zanganeh noted that most OPEC members are Iran’s friends but some, despite the fact that Iran has never shown them any hostility, have chosen to act as enemies.

Stressing that OPEC's integrity was at stake, he said, "Iran is not threatening to leave OPEC, but I believe OPEC is going to die under these circumstances.”

Political Tool

Prior to the 176th OPEC meeting, Zanganeh met with Venezuelan Oil Minister Manuel Quevedo who holds the rotating presidency of OPEC this year.

During the meeting, the two sides talked about the status of OPEC and stressed that no country should impose decisions on OPEC from outside.

“Such behavior is dangerous for OPEC’s survival,” Zanganeh said during the meeting, adding that OPEC was not a political organization but unfortunately, some members wanted to use it as a political tool in line with US plans.

Oil prices rose more than $1 a barrel on Monday, with OPEC and its allies on track to extend supply cuts until at least the end of 2019.

Front-month Brent crude futures for September touched an intraday high of $66.63 a barrel and were up $1.72, or 2.7%, at $66.46 a barrel.

US crude futures for August climbed $1.52, or 2.6%, to $59.99 a barrel, after earlier hitting their highest in over five weeks at $60.13.