Seven weeks before comprehensive US sanctions take effect, Iran’s officials are fretting about falling oil exports and the effect on a crippled economy.
The latest concern came out Sunday in Tehran’s complaint about the Organization of the Petroleum Exporting Countries (OPEC), which has helped enable the American restrictions by increasing oil production.
“Saudi Arabia and the UAE are turning OPEC into a tool for the US and consequently the organization has not much credit left,” Iran’s OPEC governor Hossein Kazempour Ardebili asserted. “It is a fact that OPEC is losing its organizational character and becoming a forum.”
In May, Donald Trump foreshadowed additional US sanctions to limit Iran’s oil sales as he withdrew the US from the 2015 nuclear agreement between Tehran and the 5+1 Powers (US, UK, France, Germany, China, and Russia). The comprehensive American restrictions will be implemented on November 5.
Seven weeks after Trump’s announcement, OPEC members and Russia agreed an increase in production by about 1 million barrels per day, covering any shortfall from less Iranian oil on the market.
Analysts estimated that the combination of the US shock and OPEC’s action would reduce Iran’s exports by up to 40%, from 2.5 million barrels per day to about 1.5 million bpd. Tehran’s sales soon dipped to just over 2.1 million bpd.
Kazempour Ardebili insisted on Sunday that the OPCE’s arrangements — including non-OPEC Russia, despite its political alliance with Iran over the nuclear deal and other issues — have already lost their effect. He claimed producers such as Iraq, Algeria and Nigeria are already breaking the terms.
However, Kazempour Ardebili undercut his argument by saying that the three countries are increasing, not decreasing, their output — a step which would only increase pressure on Iran.
He aimed specifically not only at Saudi Arabia but also at Moscow in his criticism:
Any country will naturally try to sell its oil at the highest rate possible to increase its own revenues.
Nevertheless, the behavior of Saudi Arabia and Russia in dealing with Iran in terms of their oil production will be recorded in history and the future generations will realize that…both of these countries chose to welcome the sanctioning of an OPEC producer.
Trackbacks/Pingbacks