The Borneo Post

OPEC showdown looms as Iran, Saudi argue over output hike

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VIENNA: OPEC ministers are bracing for a stormy meeting in Vienna yesterday where they will discuss a Saudi proposal to hike oil output despite fierce resistance from Iran, setting the stage for a showdown between the arch foes.

At stake is the fate of an 18- month- old supply- cut deal between members of the Organizati­on of the Petroleum Exporting Countries and allied countries credited with clearing a global oil glut and lifting crude prices.

But Saudi Arabia, backed by non- member Russia, says the time has come to raise production to meet growing demand and appease major consumer countries like the United States, India and China who have complained about the spike in prices.

“Our customers have spoken loudly and we must listen to them,” Saudi Energy Minister Khalid al-Falih said at a technical meeting on the eve of the OPEC gathering in Vienna.

But hopes of a compromise were dealt a blow when Iranian Oil Minister Bijan Namdar Zanganeh walked out of the meeting early, telling reporters: “I do not think an agreement can be reached.”

Iran has bristled at the thought of easing the output ceiling at a time when its oil industry is facing renewed sanctions over US President Donald Trump’s decision to quit the internatio­nal nuclear deal with Tehran.

However Riyadh, which cheered Trump’s move, is under pressure from its US ally to open the spigots as Trump hopes for lower pump prices ahead of November’s midterm elections.

Iran’s Zanganeh, speaking to reporters on the sidelines of a Vienna seminar earlier this week, accused Trump of trying to politicise OPEC and said it was US sanctions on Iran and Venezuela that had helped push up prices.

Venezuela, in the throes of an economic crisis that has slashed its petroleum production, is also opposed to changing the oil cartel’s output policy, as are several other countries who would struggle to immediatel­y increase production.

But Saudi Arabia has the backing of Russia, which is facing mounting calls from domestic oil firms to end the cutbacks so they can cash in on the higher oil prices. — AFP

 ??  ?? The logo of Russian oil company Lukoil. Saudi Arabia, backed by non-member Russia, says the time has come to raise production to meet growing demand and appease major consumer countries like the United States, India and China who have complained about...
The logo of Russian oil company Lukoil. Saudi Arabia, backed by non-member Russia, says the time has come to raise production to meet growing demand and appease major consumer countries like the United States, India and China who have complained about...

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