File Photo: The logo of the Organization of the Petroleum Exporting Countries at its headquarters in Vienna, Austria December 7, 2018 (Reuters)
Iran has told OPEC that it opposes delaying the oil producer group’s next meeting, setting the scene for another fight with fellow members as US sanctions put Tehran under unprecedented economic pressure with its oil exports down to just a trickle.
OPEC gatherings are often fraught due to acrimony between Iran and its arch-rival Saudi Arabia, the group’s de facto leader and top global oil exporter.
The last time the Organization of the Petroleum Exporting Countries failed to agree a clear oil-output strategy was in 2016, after Iran insisted on steeply raising its production following the lifting of Western sanctions against it.
The United States reimposed sanctions on Tehran last year, and as a result, Iranian oil exports have collapsed to a fraction of their normal levels.
US President Donald Trump has repeatedly demanded that Saudi Arabia compensate for the drop in Iranian supplies by increasing its own production, a move that Iran has said undermines the proper functioning of OPEC.
Iranian Oil Minister Bijan Zanganeh, in a letter seen by Reuters, said he disagreed with an OPEC proposal to reschedule the group’s next meeting to early July.
OPEC is currently scheduled to meet on June 25, followed by talks with its allies led by Russia on June 26. However, Russia suggested moving the meeting to July 3-4 and Riyadh supports the request, sources within the organization told Reuters.
“I disagree with the proposed changes of the dates. I have already tight commitment in that period and, moreover, no reason was provided on the urgency of giving consideration to this date change,” Zanganeh wrote.
In a separate letter, OPEC said Algeria and Kazakhstan also disagreed with moving the dates.
Sources said Venezuela and Libya additionally opposed a schedule change.
“It is becoming really embarrassing,” an OPEC source said.
Changing the dates would require unanimity, several OPEC sources said. Two sources said one option would be to keep the OPEC meeting unchanged and move the talks with allies to July.
OPEC and its allies, a grouping known as OPEC+, agreed in December to reduce supply by 1.2 million barrels per day from Jan. 1. OPEC’s share of the cut is 800,000 bpd, to be delivered by 11 members - all except Iran, Libya and Venezuela.
Saudi Arabia initially signaled it would make sense to raise supply in the second half. However, it seems more willing now to keep output cuts in place amid a decline in oil prices, which on Tuesday fell to their lowest since January.
In Russia, the head of top oil producer Rosneft, Igor Sechin, said on Tuesday he would seek compensation from the Russian government if Moscow agreed to limit output further.
“Iran is likely to oppose any decision to raise output but in case OPEC decides to opt for a policy rollover it should be a smoother meeting,” said Amrita Sen, co-founder of Energy Aspects consultancy.