Iran says will not block Opec+ deal but warns of death of cartel
Comments come in response to growing Russian and Saudi Arabian dominance
Iran will not block an extension of the Opec+ production deal, its oil minister Bijan Zanganeh said on Monday, but warned that the cartel could “die” if Saudi Arabia and Russia continue to “unilaterally” set output policy.
The comments from Mr Zanganeh clear a potential hurdle to Opec and its allies from maintaining production curbs for at least another six months, but point to a deepening split in the group over the growing dominance of Riyadh and Moscow.
Russian president Vladimir Putin announced at the G20 in Japan at the weekend that he and Saudi Arabia’s crown prince, Mohammed bin Salman had agreed the supply deal should be extended by 6-9 months, illustrating how production policy is increasingly being decided away from the cartel’s other members.
“I have no difficulty with the extension of the cut,” said Mr Zanganeh. “My problem is unilateralisation” which is “threatening the existence of opec”.
He warned that Opec was “going to die” if these processes continued, referring to the increased influence of the Russia-Saudi energy alliance at the expense of other members of the cartel.
Russia is not an Opec member but has been allied with the group since 2016.
Opec ministers are meeting on Monday in what is expected to be a rubber-stamping of the decision to extend the group’s official 1.2m barrel a day output cut – in place since January – until at least the end of the year.
Brent crude, the international oil benchmark, rose 2.5 per cent to $66.33 a barrel ahead of the formal meeting of ministers and after the resumption of trade talks between the US and China.
The so-called Opec+ group, including non-members like Russia and Mexico, will then meet on Tuesday.
Iran has been excluded from the cuts deal as its oil exports have been hit by US sanctions.