Saudi, Iran brace for tense OPEC meet over oil supply

Saudi, Iran brace for tense OPEC meet over oil supply
Observers expect Friday's OPEC gathering to be one of the most heated meetings between the oil producing cartel in years.
2 min read
20 June, 2018
Saudi and Russian energy ministers hold press conference with OPEC head [Getty]

Saudi Arabia insisted Wednesday it would do "whatever is needed" to avoid oil supply shortages, as the kingdom is increasingly poised for a showdown with arch-rival and fellow OPEC member Iran over talks on Friday about easing a production-cut pact. 

"We will do whatever is needed to maintain market stability and ensure that there are no oil supply shortages," said Abdulaziz bin Salman, a Saudi prince and minister of state for energy affairs.

"Many consumer countries are anxious" about potential oil shortfalls, he said, noting that global oil demand is expected to climb in the coming months. 

The remarks came at a petroleum conference in Vienna.

Along with non-member Russia, Saudi Arabia is pushing hard to ease a production cap that has more than doubled oil prices to around $70 per barrel since 2016. Washington has been pressuring Riyadh to boost its output to bring down prices.

Speaking at the same event in Vienna, Iranian Oil Minister Bijan Namdar Zanganeh reiterated his country's resistance to hiking oil output and accused Trump of trying to politicise OPEC.

Trump has in recent months repeatedly blamed OPEC for a spike in oil prices, but Zanganeh said it was US sanctions on Iran and Venezuela that had fuelled fears of a supply crunch and put pressure on prices.

"You cannot impose unilateral trade sanctions against two founding members of OPEC, two major oil producers... and at the same time expect the global oil market not to show tensions," Zanganeh said.

"You cannot have your cake eat and it too."

OPEC will discuss possible changes to the supply-cut deal in the Austrian capital later this week. Russia, part of 10 non-member partner countries, will join the talks Saturday. 

The gathering is expected to be one of the most heated OPEC meetings in years. 

Iran previously said Venezuela and Iraq will join it in blocking a proposal to increase oil production by 1.5 million barrels per day worldwide. Unlike Saudi Arabia and Russia, which have ample spare capacity to increase production, many OPEC countries would be unable to significantly raise output.

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