US-Saudi Oil Increase Plan a Ploy Against OPEC

US-Saudi  Oil Increase  Plan a Ploy Against OPECUS-Saudi  Oil Increase  Plan a Ploy Against OPEC

The US political pressure on Saudi Arabia to boost oil output, irrespective of OPEC's agreement on production curb, is more of a conspiracy against the organization to undermine its decision makings, the head of Majlis Energy Commission said.

"OPEC should preserve its independence in decision-making and maintain a clear position against political interventions, which are aimed at weakening the OPEC members' role in future decisions," Fereydoun Hassanvand was also quoted as saying by Shana on Sunday.

"Otherwise such unilateral hawkishness by the US will only ruin the organization," he added.

The US has reportedly asked Saudi Arabia, OPEC’s largest producer and de facto leader, and others to relax output restraints put in place in early 2017, as prices near $80 per barrel pose a threat to economic growth.

However, several members, including Iran, disagree with the idea on the need to pump more oil. 

Hassanvand noted that Iran will maintain its position against such moves.

The lawmaker urged other members to remain committed to the limitations set by the organizations and said, "OPEC has faced several ups and downs in the past decades and its decisions ought to secure the members' benefits."

Iran's defiance follows similar resistance from Iraq and Venezuela, meaning three of the five countries that founded OPEC now oppose the Saudi plan.

Iraq said OPEC should resist pressure to increase oil supplies, strengthening opposition to plans by Saudi Arabia as the group prepares to meet this week. Producers meet on June 22-23 to set policy. 

OPEC’s second-biggest producer said supply curbs by the organization have not yet achieved their purpose, with oil prices still below the desired level, Bloomberg reported.

The three countries are going to push for keeping the OPEC ceiling in place until the end of 2018.

"Iran has always proved its devotedness to OPEC decisions and will remain committed to the production ceiling until the end of 2018," Hassanvand said.

The lawmaker added that the country rejects unilateral decisions made by some producers without consulting others.

This is while after almost 18 months of the OPEC and non-OPEC deal to cut production, Saudi Arabia and Russia have said they are prepared to pump more to calm consumer worries about supply and prices.

However, according to the Iranian official, the need of the oil market for more oil at the present time is rather exaggerated and could cause great damage to global markets.

Experts believe that if Tehran joined other OPEC members to wind down the cuts, all suppliers would enjoy the rise, but Iran will not be able to sell the added barrels regarding the upcoming sanctions by the US, which are to take effect on August 6, 2018.  

US President Donald Trump decided on May 8 to abandon the Iran nuclear deal and revive sanctions against the oil-rich country.

Add new comment