Iran rejects Saudi energy minister’s remarks on JMMC
Iran dismissed the recent remarks by Saudi energy minister that the Joint Ministerial Monitoring Committee (JMMC) overseeing the OPEC/NON-OPEC supply agreement will no longer track individual countries’ compliance with quotas.
According to Fars News Agency, Iran’s Governor at the Organization of Petroleum Exporting Countries Hossein Kazempour Ardebili further said on Sunday, “The remarks by Saudi energy minister are not based on an OPEC approval and are just his personal view. (OPEC) members do not have such a resolution.”
Asked if Saudi Arabia can boost oil production, he said, “Any increase in production more than the quotas is a violation of the current agreement as long as it is not approved by the OPEC conference.”
Saudi Energy Minister Khalid al-falih told the other members that the JMMC would no longer track individual country compliance with quotas, as the deal has now shifted to a collective production ceiling.
Falih, who chairs the JMMC, said the entire coalition’s compliance with the ceiling will continue to be monitored and reported, according to a letter sent Thursday to his counterparts.
“The shift from reporting individual country conformity to reporting overall conformity will be adopted to reflect the June 23 decision of the 4th OPEC and NON-OPEC Ministerial Meeting that countries will strive to adhere to the overall conformity level, voluntarily adjusted to 100 percent, as of July 2018,” Falih wrote.
Iran has insisted that the supply accord would be breached if members exceed their individual quotas and infringe on others’ market share.
The JMMC has never publicly revealed individual country performance on quotas but has used the data to privately pressure non-compliant members to do their fair share since production cuts were implemented in January 2017 to help draw down oil in storage.
With the market now rebalanced and US President Donald Trump pressuring Saudi Arabia to cool the market, OPEC agreed on June 23 in Vienna with Russia and nine other allies on a 1-mbd output boost to head off expected supply disruptions from US sanctions on Iran and Venezuela’s economic crisis.
Meanwhile, Ardebili urged US President Donald Trump not to use the nation’s Strategic Petroleum Reserve (SPR) to push prices lower, and instead drop sanctions on Iran’s crude exports.
“My advice to you, Mr. President, is to avoid touching the SPR — to cool down and give up sanctioning Iranian oil,” Ardebili said by email.
The Trump administration is actively considering tapping into the nation’s emergency oil inventories as political pressure grows before congressional elections in November, according to people familiar with the matter.
“Mr. President, as I have foreseen earlier, it seems you are resorting to the SPR due to the fact that there is no spare capacity to cover for Iranian exports — but there will be many repercussions,” Kazempour said.
Trump is pressing Saudi Arabia and some other OPEC members to fill in any supply gap that will arise when US sanctions restrict Iranian crude exports.
“Saudi Arabia, the UAE and Russia pretended to be able to deliver 2.5 million barrels a day of Iranian exports,” Kazempour said.
“That was a miscalculation, Mr. President: You have fallen in their trap, and prices will go up.”
It’s not the first time the Iranian official has responded to Trump’s policies. Earlier this month, Kazempour said that tweets by Trump criticizing the Organization of Petroleum Exporting Countries had pushed oil prices up by about $10 a barrel.
“If we in Iran were to stop our exports for just one month to show what it can bring to the world economy, you would have thought twice,” Kazempour said. “But we are a civilized nation, and a responsible government.”