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Iran Says 3 OPEC members will veto Saudi-backed oil production boost

Oil field (Aban News)
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Iran says Venezuela and Iraq will join it in blocking a proposal to increase oil production that’s backed by Saudi Arabia and Russia when OPEC and its allies meet in Vienna this week.

“Three OPEC founders are going to stop it,” Iran’s representative to the bloc, Hossein Kazempour Ardebili, said Sunday. “If the Kingdom of Saudi Arabia and Russia want to increase production, this requires unanimity. If the two want to act alone, that’s a breach of the cooperation agreement.”

Iran’s comments show that OPEC members are set to clash when they meet this week in Vienna to discuss the proposal to end global output cuts.

While Saudi Arabia and Russia are pumping below capacity, many countries in OPEC including Iran and Venezuela would struggle to raise output even if their quotas were increased.

OPEC and its allies could consider a production increase of as much as 1.5 million barrels a day, Russian Energy Minister Alexander Novak said last week. That would be enough to offset the supply losses from Venezuela and Iran foreseen by the International Energy Agency. Saudi Arabia has been discussing different scenarios that would raise production by 500,000 to 1 million barrels a day, according to people familiar with the matter.

OPEC is also facing pressure from outside. President Donald Trump has continued to criticize the group. Worried about the impact of gasoline prices on mid-term elections, the Trump administration is lobbying hard for a surge in production.

“We call upon our brothers in OPEC and Russia that we do not need to appease Trump, who sanctions two OPEC founders and also Russia,” Kazempour Ardebili said. “We are sovereign nations driven by our own responsibilities and values. The whole world has to stand against these arrogant attitudes –– and will.”

U.S. sanctions will contribute to Iran and Venezuela potentially losing almost 30 percent of their oil output next year, requiring extra supplies from the group’s Persian Gulf members, the International Energy Agency said last week.

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© 2018 Bloomberg News

Distributed by Tribune Content Agency, LLC.

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