Iran has insisted that the oil cartel OPEC will not work with the US to punish Tehran, following reports that the Trump Administration agreed a rise in Saudi production before announcing American withdrawal from the nuclear deal with the Islamic Republic.
“It’s crazy and astonishing to see instruction coming from Washington to Saudi to act and replace a shortfall of Iran’s export due to their illegal sanctions on Iran and Venezuela,” Iran’s OPEC governor, Hossein Kazempour Ardebili, said on Friday.
A senior US official approached Saudi Crown Prince Mohammad bin Salman two days before Trump announced the withdrawal on May 9, with the order of expanded US sanctions — including on the oil and gas sector — in an attempt to break Iran’s economy, according to “three officials familiar with the matter”.
“Saudi industry sources” said Riyadh agreed in part because higher crude prices could help the stock market float of a stake in state oil giant Saudi Aramco expected to take place in 2019.
Iran’s Ardebili insisted:
No one in OPEC will act against two of its founder members. The US tried it last time against Iran, but oil prices got to $140 a barrel.
OPEC will not accept such a humiliation. How arrogant and ignorant one could be [to] underestimate the history of 60 years’ cooperation among competitors. We have to live together – we cannot change geography but we must build better history.
OPEC members are scheduled to meet in Vienna, Austria, on June 22.
Analysts say the US sanctions, which threaten to punish refiners, shippers, and insurers over transport and processing of Iranian oil, could reduce Iran’s export level of 2.5 million barrels per day by up to 40%.
Such a reduction would significantly affect Government revenues, which are highly dependent on oil income despite efforts to diversify and expand non-oil production.