OPEC Aims for Oil Below $80 Amid Disagreement Over Quotas

Lloyd Doyle
September 23, 2018

On Friday, a source familiar with the discussions told Reuters OPEC and its allies led by Russian Federation were considering the possibility of raising crude supplies by a further 500,000 barrels per day (bpd) as USA sanctions on OPEC's third-largest producer, Iran, bite into Tehran's exports.

Saudi Arabian Energy Minister Khalid al-Falih talks to reporters at the OPEC Ministerial Monitoring Committee in Algiers, Algeria September 23, 2018.

Ahead of Sunday's meeting, Saudi Energy Minister Khalid al Falih maintained, while speaking to reporters, that the "markets are adequately supplied", insisting that OPEC does not control oil prices.

Rather than OPEC controlling prices, analysts have instead blamed Trump's latest round of sanctions on OPEC-member Iran for driving up the price, as supply from Tehran decreased.

"We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!"

The Iranian oil minister warned that OPEC's authority is being jeopardized by the USA shadow effect on the allies in the region.

"Saudi Arabia has made the mistake of trying to compensate for the loss of Iranian supplies with just-in-time replacement; but the oil market is looking for greater supply security than that". Trump wrote on Twitter.

Higher gasoline prices for USA consumers could create a political headache for Trump before November mid-term congressional elections.

Iranian oil minister Bijan Zanganeh described Mr Trump's tweet as "the biggest insult to Washington's allies in the Middle East".

Brent has been trading just below $80 a barrel, backed by concerns of supply shortages from looming US sanctions against Iran, which are set to take effect in November.

Agreed in June of this year, the Vienna deal saw major oil producers agree to boost crude oil output by one million barrels-per-day, as part of a compromise deal to ease oil prices and tackle supply issues caused by a fall in output from Iran and Venezuela.

Falih said the big challenge for 2019 was rising output from non-OPEC producers, which could change the market dynamic and decision-making.

Other reports by Iphone Fresh

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