Portuguese / Spanish / English

Oil deal threatened as Iran accuses Saudi of declaring 'war on oil prices'

Tension between the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers is threatening a new deal that was to be agreed by the end of this month.

In September, OPEC — which accounts for a third of global oil production — agreed to cap output at around 32.5 to 33.0 million barrels per day, instead of the current 33.64 million bpd to prop up oil prices, which have more than halved since mid-2014. A deal to ratify the agreement was scheduled to take place at the end of November.

The meeting scheduled for 30 November was expected to rubber stamp the deal between OPEC and Russia and some other non-OPEC producers such as Azerbaijan and Kazakhstan. However, disagreements over exactly how OPEC countries should reduce production threaten to derail the plan. On Friday, OPEC cancelled an experts' meeting with non-OPEC producers scheduled for today (Monday) after Saudi Arabia said that the organisation needs to sort out its differences first.

In recent weeks OPEC's second and third biggest producers, Iraq and Iran, have expressed reservations about the mechanics of output reductions, while Saudi Arabia voiced concern about Russia's willingness to reduce output. Reuters reported that the Iranian state news agency MEHR published an editorial on Sunday accusing the Saudis of declaring a new "war on oil prices" and reneging on their promises to limit output.

Doubts about OPEC's ability to deliver promised cuts have pushed the price of oil down by 2 per cent to less than $47 per barrel.

International OrganisationsIranMiddle EastNewsOPECSaudi Arabia
Show Comments
Show Comments