Sweet End to Breathtaking Meeting
Iran Demand Included in OPEC Decision
The 174th Meeting of the OPEC Conference was held in Vienna, Austria, on June 22, 2018.
"Noting that OPEC Member Countries have exceeded the required level of conformity that had reached 152% in May 2018," OPEC said in its final statement. "Accordingly, the Conference hereby decided that countries will strive to adhere to the overall conformity level of OPEC-12, down to 100%, as of 1 July 2018 for the remaining duration of the above mentioned resolution and for the JMMC to monitor and report back to the President of the Conference."
This might be the most important part of OPEC statement. The Iranian delegation to OPEC Conference struggled hard for its inclusion in the final statement. To that end, Iran's Minister of Petroleum Bijan Zangeneh stormed out of the Joint Ministerial Monitoring Committee (JMMC) meeting when 1 mb/d output increase was suggested. Iran was determined to veto any increase in OPEC output.
June 19, 2018, Hotel Kempinski
Kempinski Hotel is swarmed with journalists desperately waiting for Iran's Minister Zangeneh. They preferred Zangeneh's remarks to OPEC Secretary General Mohammad Barkindo's gala dinner.
"Oil is not a weapon to be used as a political tool against certain countries. OPEC is not a political organization either, and must condemn any use of oil as a weapon or tool against certain countries," said Zangeneh upon arrival in the Austrian capital where OPEC Headquarters is located.
It was about 8 pm local time when Zangeneh arrived in the hotel and was immediately flooded by questions from journalists who were asking about US President Donald Trump's meddlesome remarks against OPEC.
"OPEC is not an organization to follow the US president's instructions. Mr. Trump thinks he can impose his views on OPEC and by resorting to imposition of sanctions against two key members threaten the market. That is why he expects OPEC to reconsider its decisions in order to help calm down prices," he said.
Zangeneh reiterated the necessity for depoliticized oil market, noting: "Iran will oppose any OPEC oil output hike if decided by the 174th meeting. Discussing OPEC output increase will be a green light to US decisions, while we are not faced with imbalanced oil market and we don't need to enhance production."
The Iranian minister was determined in making such remarks at a time Russia and Saudi Arabia, both initially favoring oil output hike, could supply a total of 19 mb/d of crude oil.
June 20, 2018, Hofburg Imperial Palace
Minister Zangeneh made a strongly-worded statement on the first day of 7th OPEC International seminar which was not attended by Saudi Minister of Energy Khalid al-Falih.
"The United States cannot expect OPEC to act against two of its founding members. On the contrary, OPEC is an independent, mature and responsible organization, expected to strengthen its unity and authority in accordance with its Statute, support de-politicizing the market, and condemn such unilateral actions that disrupt the natural trend of oil market," said Zangeneh.
"Oil market analysts ask an important question: How should a measure by OPEC to replace the production of its members whose production has declined due to imposition of unilateral and illegal sanctions be interpreted? It would be hard to think of anything but giving a carte blanche to US to continue such illegal sanctions, pressuring OPEC and use oil as a political tool in international relations?” he asked.
Zangeneh added: ""Such unilateral actions clearly means threatening companies and banks active in the market, and putting pressure on them."
The Iranian minister said: "I would like to reiterate that, in our view de-politicizing the oil market is vital for market stability and its stakeholders."
He added: "Moreover, I believe, as demonstrated in 'Declaration of Cooperation', OPEC has set an excellent example in demonstrating the power of a win-win cooperation that benefitted the producers, consumers, and promoted market stability, energy security and world economic growth."
He said: We do believe that all oil market players need to admit that market fundamentals should dominate the market and play a determining role in it."