Iran’s oil sales continue to rise in the face of Saudi calls to cut production

Saudi Arabia-Iran Tensions Ignite OPEC Worries | CNBC

Saudi demands that Organization of Petroleum Exporting PEC members, including Iran, cut oil production directly contradict an agreement reached earlier this year in Algiers with the Islamic Republic of Iran according to Iranian sources.

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The agreement negotiated in September explicitly exempted Iran from the coming oil production cuts to be proposed at the Vienna conference held in November 2016 but Saudi Arabia is now demanding Iran cut its oil production, demands that many experts speculate could lead to the failure of the November 30 deal in Vienna.

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Investors believe that if the Saudi demands are accurate and the Algiers framework no longer applies that oil prices have even further to plunge, closing lower on Friday after the news broke. Iran claims that Saudi Arabia is using its position to force OPEC member states into accepting their demands, “…Saudis, as OPEC’s largest oil producers plan to apply pressure on certain countries in order to dictate their policies to the member states.”

Iran’s goal is to increase production and cites the dominance of Iraq and Saudi Arabia in OPEC’s oil production over the past 12 years and implies that Saudi Arabia has taken advantage of chaotic conditions in major producers like Venezuela and Libya to increase its share of the oil market disproportionately.

In other words, Saudi Arabia has, in one sense, seized shares of other OPEC manufacturers during the past decade and, once again though this time with a politically motivated and non-economic plan, Saudi princes intent to wage a full-blown psychological war against Iran a number of other OPEC members in order to prevent achieving a comprehensive agreement on reduction of oil output so that they could maintain the highest production capacity while ignoring interests of other members.

Speculation that Iran will take an increasingly independent approach to the oil market are bolstered by recent maneuvers on the part of Iran to both limit the impact of the conflict with Saudi Arabia on its own oil market, undercutting purported Saudi attempts to “attain its political objectives in the oil market by waging a new oil war on the verge of the OPEC meeting in Austria.”

[Zero Hedge]

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