PW Photo: Vandana Hari - Trump tweet and OPEC meet cannot keep Brent from racing towards us$80 again!
Saudi Arabia sending a message through the media this week that it would be “comfortable” with Brent rising above $80, at least in the short term, while the market adjusts to the loss of Iranian barrels, suggests that the de facto OPEC leader may be running out of capacity as well as patience.
Barely hours after meeting US Energy Secretary Rick Perry in Moscow last week, Russian Energy Minister Alexander Novak proceeded to criticise US sanctions against Iran as “unproductive” and “wrong”.
Saudi Arabia and Russia, steering the ship on the OPEC/non-OPEC production policy, look like they have had enough of the US aiming to squash Iranian supplies with its sanctions, while exhorting them to pump more to plug the shortfall, and lambasting them for restraining production and driving up prices.
It has become a tough balancing act for the duo, who have faced flak from Iran’s enraged oil minister Bijan Zanganeh since their agreement of June 23 to boost output by 1 million b/d. The rhetoric from Tehran rose this week, targeting a planned re-allocation of country quotas at a committee meeting in Algiers this weekend.
Zanganeh has a valid argument that the six-member OPEC/non-OPEC Joint Ministerial Monitoring Committee, or JMMC, is not authorised to reallocate output quotas — a decision that needs to be agreed by all the ministers. But he is bound to be ignored.
Founder, Vanda Insights