Iran’s OPEC Governor: Crude Could Plunge to $40

Oil prices will plummet to $40 a barrel unless OPEC and its allies cut output significantly, and the group is unlikely to succeed in reviving the market, a senior Iranian oil official said.
Production will need to be reduced by at least 1.4 million barrels a day to prevent oversupply, Iran’s OPEC Governor Hossein Kazempour Ardebili said in an interview with Bloomberg on Tuesday. 
While Iran will not participate in any cuts while US sanctions on its exports remain in place, Kazempour said the group may be unable to reach an agreement to curb supply when it meets in Vienna later this week.
 “I do not think they are thinking to have a cut -- they may want to have excuses, or have a proposal on the table that is not grabbed by others, and say ‘OK, I told you so’,” Kazempour said.
Iran, a founding member of OPEC, has been forced to cut production from 3.8 million barrels a day earlier this year to about 3 million last month as US sanctions on its exports kicked in and buyers stayed away. 
Kazempour doubts OPEC+ will eventually agree to extend the pact. Nations which have “put the barrels into the market in the last three months should cut it back,” he said.
“I doubt, with the failure they had in the last three months, that the declaration of cooperation gets extended,” he said. “Why institutionalize a failure? And it needs unanimity to be extended.”
He also raised the prospect that OPEC, which has held together for more than half a century through war, sanctions and price slumps, may break apart.

Frustration of Small Producers   

“There is a sense of frustration prevailing, especially among small producers not at the level of Qatar which will leave OPEC in January,” because oil’s slump and the lost revenue gives them a reason to leave, Kazempour said
Qatar’s decision to quit OPEC shows the frustration of small producers at the dominant role of a Saudi and Russia-led panel, a top Iranian official said, adding that any supply cuts should come only from countries that had increased output.
The comments underline tensions within the Organization of the Petroleum Exporting Countries ahead of this week’s meeting to discuss curbing output and prolonging a supply-limiting pact with Russia and other non-members into 2019. 
Iran has been angered by higher production from Saudi Arabia and Russia, which chair a panel called the Joint Ministerial Monitoring Committee, after calls from US President Donald Trump to pump more oil to offset a drop in Iranian exports hit by US sanctions. 
“This is very regrettable and we understand their frustration,” Kazempour, told Reuters, referring to Doha’s announcement on Monday. 
“There are many other OPEC members frustrated that the JMMC is deciding on production unilaterally and without the required prior consensus of OPEC.” 
Oil prices have fallen from a four-year high above $86 a barrel in early October on concerns over excess supply. OPEC and its allies, which have had a supply pact since 2017, meet in Vienna on Thursday and Friday to discuss supply cuts.