Iran Says OPEC May Need Extraordinary Meeting Over Output

Iran’s oil minister said OPEC may need to hold an extraordinary meeting should the organisation of oil producers fail to prevent member countries from adjusting their crude production without approval, the Shana news agency reported on Wednesday.

After months of underproduction, the Organization of the Petroleum Exporting Countries agreed with Russia and other oil-producing allies to raise output from July by returning to 100 percent compliance with previously decided cuts. That would mean an output increase of roughly 1 million barrels per day.

Minister Bijan Zanganeh sent a “letter of complaint” to his United Arab Emirates counterpart after noticing that some OPEC members were trying to adjust output, the Iranian agency said.

Zanganeh told UAE Energy Minister Suhail al-Mazrouei, who holds the OPEC presidency in 2018, that an OPEC/non-OPEC committee that monitors output compliance, known as the JMMC, should not distribute output increases among other producers.

“In case the JMMC does not fulfil its mandate … and has a different understanding from the decision of the (OPEC) conference, the issue should be raised at an extraordinary meeting of the OPEC conference for decision-making,” Zanganeh wrote.

OPEC sources, however, played down the possibility of an extraordinary meeting.

“There is no need,” one OPEC source said.

Zanganeh’s comments underline the still-simmering tensions after OPEC’s June meeting.

Saudi Arabia said the deal allowed countries able to produce more to meet the group’s overall conformity level, meaning some members, such as itself, could make up for shortfalls elsewhere. Iran, which faces U.S. sanctions, disagreed and criticised Saudi plans to boost output above targeted levels.

The JMMC is chaired by Saudi Arabia and is due to meet next on Sept. 23 in Algeria.

Iran is not on the committee, which also includes Russia, the UAE, Oman, Kuwait, Algeria and Venezuela.

Last month, Zanganeh told his Saudi counterpart that the OPEC supply pact does not give member countries the right to raise oil production above their targets.

Source: Reuters

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