EghtesadOnline: Iran, or any other member of the Organization of Oil Exporting Countries, can unilaterally thwart efforts to reach an agreement to raise the group’s oil production, as it requires a 100% consensus to secure a new pact, a prominent Iranian energy analyst from London University said.
“If Iran and Venezuela do not vote for an increase in the organization’s crude output, it will not materialize even if the United States asks Saudi Arabia to do so,” Narsi Ghorban was quoted as saying by ILNA on Saturday.
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.
About speculations on OPEC’s decision during the June 22 meeting with its partners, Ghorban noted that in general, OPEC’s issues can only be solved by consensus and not with votes of 50% plus 1, Financial Tribune reported.
“Thus, if Iran insists on its position and does not accept the members’ possible decision to increase oil production, the current output ceiling will continue. But, behind the scene, they will open the taps,” he said.
Iraq said this week that OPEC should resist pressure to increase oil supplies, strengthening opposition to plans by Saudi Arabia.
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.
Its defiance means three of the five countries that founded OPEC now oppose the Saudi plan.
The energy expert stressed that Saudi Arabia’s intention is still not clear, as it is keen to see higher oil prices to boost the valuation of Saudi Aramco ahead of a much-anticipated IPO on the one hand, and it is under US pressure to keep prices at the present level.
Ghorban said that if Tehran and Caracas 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 Iran nuclear deal and revive sanctions against the oil-rich country.
OPEC is likely to reject a request by Iran to discuss US sanctions against Tehran at this month’s meeting of the oil producer group, a source familiar with the matter told Reuters a week ago.
Iran’s OPEC Governor Hossein Kazempour Ardebili has asked the chairman of the OPEC board to include a sanctions debate on the agenda for the June 22 talks.
The source said that after receiving Kazempour’s request, the UAE’s OPEC Governor Ahmed al-Kaabi sought the advice of legal counsel. The counsel responded negatively to Iran’s plea, the source said, on the grounds that the ministerial agenda had been finalized and could not be amended.