Oil Price the New Saudi-Iran Battle Grounds
Saudi Arabia insisted Wednesday it would do “whatever is needed” to avoid oil supply shortages, setting the stage for a showdown with archfoe Iran ahead of crunch OPEC talks on easing a production-cut pact.
“We will do whatever is needed to maintain market stability and ensure that there are no oil supply shortages,” Saudi Prince and minister of state for energy affairs Abdulaziz bin Salman said at a petroleum conference in Vienna.
“Many consumer countries are anxious” about potential oil shortfalls, he said, noting that global oil demand is expected to climb in the coming months.
Along with non-member Russia, oil kingpin Saudi Arabia is pushing hard for OPEC energy ministers and allied countries to agree this week to ease a production cap that has more than doubled oil prices since 2016.
But Riyadh, under pressure from Washington to boost output in order to bring down prices, is encountering stiff opposition from Tehran, which is facing renewed sanctions following Washington’s exit from the international nuclear agreement.
Speaking at the same event, Iranian Oil Minister Bijan Namdar Zanganeh reiterated his country’s resistance to hiking oil output and accused Trump of trying to politicise OPEC.
“The real responsibility for the current oil price hike lies with the US president himself,” Zanganeh told the audience. “You cannot have your cake eat and it too.”
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,” he said.
The OPEC cartel is set to discuss possible changes to the supply-cut deal in the Austrian capital on Friday, with 10 non-member partner countries including Russia joining the talks on Saturday.
The gathering is expected to be the most politically charged in years, but OPEC secretary general Mohammad Barkindo said he was confident a compromise could be reached.
“Despite the rising political tensions, as well as the tensions on the international trade side, we will be able to navigate this stormy weather,” he told reporters.