Iran Oil Minister Bijan Namdar Zanganeh says the Joint Ministerial Monitoring Committee (JMMC) and Joint Technical Committee (JTC) in charge of monitoring a deal between OPEC and other oil producing countries led by Russia should be terminated.
Zanganeh wrote to the OPEC secretary general Mohammed Barkindo calling for the two committees to be suspended and stopped from supervising the work they were created for, Shana reported.
"Some members of these two committees have evidently taken sides with the United States in imposing sanctions against Iran," Zanganeh wrote in his letter to Barkindo. He did not name the countries.
Zanganeh asserted the US President Donald Trump and his administration may have been able to artificially bring oil prices down but prices would rise in the future.
JMMC and JTC were established as part of a deal between OPEC and other major oil producers led by Russia in late 2016 to cut crude supplies by some 1.8 million barrels per day.
Chaired by Saudi Arabia that is openly hostile to Tehran and is a junior partner of the US, JMMC is composed of three OPEC member countries – Algeria, Kuwait and Venezuela, and two non-OPEC countries – the Russian Federation and Oman.
"They should stop their work," the oil minister said. Saudi Arabia; however, says suspending the two committees would translate into an output rise of around 1 million bpd. The JMMC is due to meet in Abu Dhabi at the weekend.
Zanganeh has also predicted painful times for international oil customers as US re-sanctioned Iran’s oil sector on November 5.
"Waivers that Washington granted to eight major oil-importing countries namely China and India are not enough for market demand," he said, adding that he sees agonizing months ahead for oil importing nations.
Zanganeh asserted the US President Donald Trump and his administration may have been able to artificially bring oil prices down but prices would rise in the future.
Saudi-Russia Plan Backfired
According to Hossein Kazempour Ardebili, Iran’s representative to OPEC, Saudi Arabia and Russia are now forced to cut production after their plan on reversing earlier cuts backfired
Pegging the potential slash at more than 1 million bpd, he said, "They have flooded the market” with lots of extra barrels.
Ardebili said the Saudis and Russians opened their taps and crude oil prices plunged by $15 a barrel over the past several days.
According to Bloomberg, the OPEC+ coalition, spearheaded by the two key producers, will discuss the possibility of cutting production again for 2019 in Abu Dhabi on Sunday, according to delegates who declined to be identified.
US WTI crude oil futures were at $65.60 per barrel on Friday, yet Brent crude oil futures were at $70.69 a barrel, 4 cents above their last close. Brent is set for a 2.9% drop for the week, its fifth straight week of declines.
Saudi Arabia and Russia have increased production to near-record levels in recent months, partly to offset concerns that US sanctions against Iran would lead to a shortage.
“The two have to cut,” Kazempour said. “The minimum they have to cut is by 1 million barrels day, otherwise the group will lose its effectiveness in influencing prices.”
Hurting Smaller Members
The drop in crude prices has hurt smaller members of the coalition who were not able to make supply increases on the same scale as Saudi Arabia or Russia, Kazempour recalled.
Three smaller nations may now be reluctant to co-operate in a collective cutback, he was quoted as saying.
The OPEC+ alliance will meet again to settle policy for 2019 in Vienna next month, where they will also discuss a framework to make their partnership more permanent.
Iran will only support a long-term agreement if it makes sure that any decisions made by the coalition are supported by all countries involved, Kazempour said.
“They have a bad record,” Kazempour said of the committee. “Why institutionalize such a failure? But, with certain terms and conditions -- such as that there will be no production increases without unanimity -- we can join it.”
