OPEC rift deepens as Iran walks out of key meeting

OPEC rift deepens as Iran walks out of key meeting

OPEC rift deepens as Iran walks out of key meeting

The brewing tensions between the world's two largest economies comes ahead of Friday's highly anticipated meeting of oil ministers from around the globe at the Organization of the Petroleum Exporting Countries in Vienna.

MINISTER of Energy, Industry and Mineral Resources Khalid Al-Falih said in Vienna on Thursday increasing oil supply by 1 million barrels per day would be a good target as the Organization of the Oil Exporting Countries and allies such as Russian Federation meet in Vienna this week.

The uncertainty heading into today's OPEC meeting has kept numerous major hedge funds on the sidelines for weeks because even with their resources, they have been unwilling to place bets on either side of the market, given the volatility usually associated with an OPEC meeting.

In 2000, then-US President Bill Clinton's energy secretary, Bill Richardson, phoned Ali al-Naimi, the Saudi oil minister at the time, during an Opec meeting to ask for more oil.

While India is not in favour of oil prices as low as $30 a barrel, the prevailing price levels are too high and stand to hurt the country's fiscal situation, Petroleum Minister Dharmendra Pradhan said on Wednesday.

Falih also said the real increase for OPEC and non-OPEC would be smaller than the nominal gain of 1 million bpd. While fuel rates have been falling over the last few days, current oil prices are still a far cry from the $45 per barrel a year ago.

Zanganeh has said the USA president is to blame for high prices because of his decision to reimpose sanctions on Iran.

Yergin said Saudi Arabia and the United Arab Emirates support the current, tougher USA policy toward Iran, Saudi Arabia's rival for influence in the region, and so will want to support Trump's call for higher production and lower prices.

After taking a hard line against any increases earlier, Iran has softened its stance somewhat, with Oil Minister Bijan Zanganeh saying Wednesday that members that cut beyond their quotas could be allowed to bring production back up to the agreed quotas.

On Wednesday, U.S. crude closed at $65.74 a barrel, down from a peak of almost $73 last month, and Brent crude, the global standard, closed at $74.61, down from $80.

Ultimately, Saudi Arabia persuaded Iran to cooperate with the plan to cut output, following calls from major consumers to curb rising fuel costs. It was up 1.2 per cent at $73.95 a barrel at 1:13 pm in Singapore on Friday.

He said that there are "many, many options. and we will settle to one of those options". Other OPEC members like Iran, Iraq and Venezuela have opposed this idea. Consecutive increase in inventory is not good for a stable market price so also is a sudden fall in inventory due to higher oil price. He said Opec could meet again in September to adjust the deal. Iran is usually not part of the committee, which includes Russia, Saudi Arabia, the UAE, Oman, Kuwait, Algeria and Venezuela. He said Trump had contributed to the rise in prices by imposing sanctions on Opec members Iran and Venezuela, which will likely lead to lower exports.

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