News ID: 255127
Published: 1014 GMT July 01, 2019

Iran warns ‘unilateralism’ could lead to OPEC collapse

Iran warns ‘unilateralism’ could lead to OPEC collapse

Economic Desk

Russia says wants Iran to be equal player in global energy market

Iranian Oil Minister Bijan Namdar Zanganeh warned on Monday that “unilateralism” among some OPEC members could ultimately lead to the death of the Middle East-dominated producer group.

Zanganeh said Iran backs cooperation with non-OPEC oil producers, but stressed the importance of achieving unity among the organization’s members in the first place and that some members of the Organization of the Petroleum Exporting Countries (OPEC) risk destroying the energy group.

"Without unity among members of OPEC, it is meaningless to plan cooperation between OPEC and non-OPEC countries,” he told reporters before heading to Vienna to attend an OPEC meeting.

“While we have not been hostile to any country, some members of the OPEC have taken the path of hostility with our nation,” Zanganeh said.

Iran has objected to policies put forward by its regional arch-rival Saudi Arabia, which along with the United Arab Emirates, has supported the US “maximum pressure” campaign against the Islamic Republic.

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

In May 2018, the United States exited a 2015 deal between Iran and world powers that curbed the Iranian nuclear program in exchange for the lifting of international financial sanctions on Iran.

After withdrawing, Washington reimposed sanctions and further tightened them from the start of May, ordering all countries and companies to halt all imports of Iranian oil or be banished from the global financial system.

Prior to reimposition of the US sanctions, Iran was the third-largest oil producer in OPEC.

Iran’s exports plummeted to 0.3 million barrels per day in June from as much as 2.5 million bpd in April 2018 due to Washington’s fresh sanctions.

Saudi Arabia and the United Arab Emirates have pledged to step up oil production to substitute Iranian barrels in line with the US policy of zeroing out Iran's oil exports.


No new charter

Later Monday, Zanganeh said he would reject the proposal to sign a new charter for cooperation with non-OPEC members, led by Russia.

"I believe it is not the time to discuss this matter because inside OPEC we have a lot of difficulty," he told reporters upon arriving in Vienna.

Zanganeh noted that he would back extending output cuts for another six to nine months. "I have no problem with a production cut ... It's going to be an easy meeting as my stance is very clear."

Russian President Vladimir Putin said on Saturday he had agreed with Riyadh to prolong existing output cuts. Saudi Energy Minister Khalid al-Falih said on Sunday that the deal would most likely be extended until March 2020 and no deeper reductions were needed.

The Iranian minister said he would not object to deepening the cuts but expressed frustration that Putin had announced the deal at a G20 summit in Japan before waiting for OPEC to gather in Vienna.

"The important thing to me is that OPEC remains OPEC. It has lost its authority and it’s on the verge of collapse," Zanganeh said.

"Iran is not going to leave OPEC but I believe OPEC is going to die with these processes," he stressed.

Zanganeh warned that members of the producer group had not gathered in the Austrian capital in order to “stamp” a decision that had already been agreed.

When asked why an agreement appeared to have been reached in Osaka, Japan, at the G-20 summit last week rather than in Vienna, Zanganeh replied: “This is my question too.”

OPEC and its allies have been reducing oil output since 2017 to prevent prices from sliding amid soaring production from the US — which has become the world’s top producer this year ahead of Russia and Saudi Arabia. The US is not a member of OPEC, nor is it participating in the supply pact. 

Russian Energy Minister Alexander Novak said after meeting Zanganeh in Vienna on Monday that Moscow was interested in Iran remaining an equal player in the global energy market.

Reuters, Press TV and CNBC contributed to this story.






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