Producers to review output cut deal May 19
Ejiofor Alike with agency reports
The Secretary General of the Organisation of Petroleum Exporting Countries (OPEC), Mr. Mohammad Barkindo, has said the group does not politicise crude oil.
This development is coming as OPEC and other oil-producing countries led by Russia will on May 19 review their agreement to cut down on oil output to prevent an energy crisis.
Barkindo’s clarification followed accusations by Iran that the United States is using oil as political weapon against Tehran.
Crude oil prices hit their highest since November in recent days after the United States said all waivers for those importing sanctions-hit Iranian oil would end this week, pressuring importers to stop buying from Tehran and thus, tightening global supply.
Washington has demanded that buyers of Iranian oil stop purchases by May 1 or face sanctions, thus ending six months of waivers that had allowed Iran’s eight top customers, most of them in Asia, to import limited volumes.
Iran’s oil minister, Bijan Zanganeh, on Wednesday warned against the use of oil sanctions “as a weapon” by the United States and the damage it was doing to OPEC.
Another OPEC founding member, Venezuela, is also the subject of United States sanctions on its oil exports to bring about political and economic change.
Zanganeh warned that nations that use oil as a weapon will bring about the collapse of OPEC.
“Those who use oil as a weapon against two founding members of OPEC are disturbing the unity of OPEC and creating the death and collapse of OPEC and the responsibility for that is with them,” Zanganeh said in a speech at an oil and gas conference in Tehran, according to Iranian news agency, SHANA.
America will not, however, be able to bring Iran’s oil exports to zero and the Islamic Republic’s neighbours are exaggerating claims of their oil production capacity that could make up for any shortfall, Zanganeh said, according to the Mehr news agency.
Iran would not leave OPEC though, the chief executive of the National Iranian Oil Company (NIOC), Masoud Karbasian, said on Wednesday, according to SHANA.
Iran is examining new ways to sell its oil, Zanganeh said, according to the Islamic Republic News Agency (IRNA).
He did not provide details.
But Barkindo said yesterday at an oil and gas exhibition in the Iranian capital that “OPEC tries to depoliticise oil,” Iran’s oil ministry reported on Twitter.
“I have told my colleagues at OPEC that you must leave your passports home when coming to this organisation,” Barkindo was quoted as saying.
Asked by a reporter if it was technically possible to implement United States sanctions against Tehran, Barkindo said: “It is impossible to eliminate Iranian oil from the market.”
Echoing Zanganeh’s comments, Barkindo said “We have faced troubles in the OPEC in the last 60 years, but we have resolved them by unity.”
“What is happening in Iran, Venezuela or Libya has an impact on all the market and the energy sector,” Barkindo said.
Meanwhile, Iran’s regional rival, Saudi Arabia has welcomed the US move to end all sanction waivers, and has said it is ready to meet oil consumers’ demand by replacing supplies from Tehran.
Oil markets had tightened this year due to supply cuts led by OPEC.
White House said after its Iran move that it was working with Saudi Arabia and the United Arab Emirates to ensure oil markets were “adequately supplied”.
Iran’s oil industry was standing up to the pressure from U.S. sanctions, Ahmad Mohammadi, the head of the National Iranian South Oil Company (NISOC) said on Wednesday, according to SHANA.
Meanwhile, OPEC and other producers led by Russia, have unveiled plans to review their agreement to cut down on oil output.
“We are conscious of the times that we have found ourselves. But the good news is that talking to all member countries we remain committed, we remain focused on our principal objective as an organisation to ensure stability at all times in the oil market, to ensure that we avoid any energy crisis that will impact on the global economy,” Barkindo explained Thursday.
OPEC and Russia-led oil producing countries, which formed a group tagged as OPEC+, had agreed to reduce excess inventories in the global market by removing 1.2 million barrels per day of crude oil from the market effective January 1, to raise prices.
A Joint Ministerial Monitoring Committee (JMMC) meeting is scheduled to take place on May 19 in Jeddah, Saudi Arabia for both groups to review the pact.
“All I can say is that the group is committed to stay united, is committed to ensure that our objective of not returning or slipping back into the chaos that we witnessed in the market following the longest cycle that we have seen from 2014 to 2016 does not repeat itself, including the volatility that we have seen in the fourth quarter of 2018,” Barkindo added.