Wall Street Journal: Iran’s oil minister late Monday accused Saudi Arabia of trying to replace its oil, a policy he said will fail, as tensions lingers between the two rival producers despite a thaw in relations between Tehran and the West.
The Wall Street Journal
LONDON (Dow Jones)–Iran’s oil minister late Monday accused Saudi Arabia of trying to replace its oil, a policy he said will fail, as tensions lingers between the two rival producers despite a thaw in relations between Tehran and the West.
According to consultancy Petro-Logistics, sanctions imposed on Iran by the West have led to a drop in Iranian exports. Iran denies this, but Saudi Arabia, which currently produces 10 million barrels a day, is stepping in to fill the gap.
In an interview with Iranian state television Press TV, Oil Minister Rostam Ghasemi said the current level of “Saudi production may be temporary, and it definitely cannot continue.”
The remarks raises the risk of renewed tensions between the two largest members of the Organization of Petroleum Exporting Countries, after a meeting collapsed acrimoniously last June.
“We have always asked that the production ceiling [of OPEC]…be maintained,” he said.
OPEC is producing more than one million barrels a day above a ceiling of 30 million barrels a day agreed in December, an overproduction largely tied to the Saudi output increase.
At the December gathering, Ghasemi met his Saudi counterpart Ali al-Naimi and said he was told Saudi Arabia wasn’t trying to take Iran’s share of the oil market. Saudi Arabia still denies its increasing production to replace Iran. But Ghasemi said “the latest policy of Saudi Arabia [has] turned out otherwise.”
Saudi Arabia’s high production is set to continue after the U.S. and the European Union have ruled out easing sanctions on Iran until it addresses concerns about its nuclear program. That is despite a thaw in relations as talks between Iran and major powers Sunday–the first in over a year–ended with a pledge to pursue discussions next month, interrupting months of steadily escalating tensions between both sides.