Last-ditch Iran-Saudi Arabia talks put the heat under oil
OIL prices rose today as tensions ratcheted up between Saudi Arabia and Iran at a crunch meeting of energy ministers in Vienna.
Th e me e t i n g o f O p e c — the 14member organisation of oil-exporting countries — had been dubbed by market watchers as the most political since the US invasion of Iraq in 2003, as Iran battles sanctions from America and pressure to lower prices.
Today the main general meeting was d e l aye d a s I ra n’s B i j a n Z a n g a n e h and Saudi’s Khalid al Falih held lastditch talks to attempt to come to an agreement.
Zanganeh left a technical meeting of the group last night saying discussions were “not good”.
A deep rift has emerged as Saudi Arabia wants to increase production by one million barrels a day — about 1% of global demand — whereas Iran is hoping to curb any rise. The increased target has been led by Russia.
The tensions put the heat under the oil price — Brent crude advancedd by 81 cent to $73.87. Shell’s shares gained 4.5p to 2621p and BP ticked up 2.5p to 562p. The oil price is up 50% over the past 12 months.
Premier Asset Management’s Jake Robbins said: “Unfortunately for Opec, the higher price has also encouraged further expansion from non-Opec producers, most notably the US shale producers who have benefitted the most from Opec’s supply constraints.
“Now some members are keen also to make the most of the higher oil price, particularly many in the Middle East and Russia who require the cash to cover big budget deficits.”
The prospect of rising fuel prices will come as unwelcome news for hard-up Britons. But they were given a fillip today as Asda, one of Britain’s biggest fuel sellers cut 2p off a litre of unleaded and 1p off diesel, promising to cap prices nationwide at 122p for unleaded and 126.7p for diesel.