Iran seeks OPEC support against US sanctions – letter

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DUBAI, May 30 (Reuters) – Iran has asked OPEC to support it
against new U.S. sanctions and signalled it is not yet in
agreement with Saudi Arabia’s views on the possible need to
increase global oil supplies, creating potential problems for
OPEC at its meeting next month.

Iran, the arch-rival of Saudi Arabia, has a history of being
difficult at OPEC meetings including in 2015 when the country
refused to sign up to OPEC policies, saying it needed to raise
output due to the easing of sanctions following Tehran’s accord
with major world powers.

U.S. President Donald Trump earlier this month pulled out of
that nuclear deal with Iran and announced the “highest level” of
sanctions against the OPEC member. Iran is the third-largest oil
producer in the Organization of the Petroleum Exporting
Countries after Saudi Arabia and Iraq.

“I would like to … seek OPEC’s support in accordance with
Article 2 of the OPEC Statute, which emphasises safeguarding the
interests of member countries individually and collectively,”
Iranian Oil Minister Bijan Zanganeh said in a letter seen by
Reuters.

Zanganeh also suggested in the letter that Iran was not in
agreement with some OPEC ministers’ recent comments on the oil
market. He said some OPEC ministers “have implicitly or
unwittingly spoken for the organization, expressing views that
might be perceived as the official position of the OPEC.”

The energy ministers of Saudi Arabia and Russia said last
week they were prepared to ease output cuts to calm consumer
worries about supply.

Raising output would bring an end to about 18 months of
strict supply curbs amid concerns that oil price have risen too
far. Oil price have hit their highest since late 2014, rising
above $80.50 a barrel this month, but have since eased.

Since the original sanctions were lifted, Iran has struggled
to raise production above 4 million barrels per day due to a
lack of new projects and the caution of Western investors.

So if OPEC decides to increase supplies, Iran is likely to
benefit less than Saudi Arabia because it would struggle to
raise output while it would also be hit by lower oil prices.

Zanganeh’s letter was addressed to the United Arab Emirates
Energy Minister Suhail al-Mazrouei, who holds OPEC presidency in
2018.

Zanganeh also said that if the latest U.S. sanctions threat
was resolved “Iran reserves the right to return to its oil
market share in the shortest possible time and resumes its
normal production-level and will not accept any limitations in
this regard.”

Zanganeh asked Mazrouei to include a separate agenda item
for the June OPEC meeting entitled “OPEC Ministerial Conference
support to the Member Countries that are under illegal,
unilateral and extraterritorial sanctions.”

In a separate letter, Mazrouei replied that there were two
options available to discuss this issue.

The first is for the OPEC governors to review the request
and include it for discussion in OPEC’s meeting later this year,
which could be held in November, according to the letter seen by
Reuters.

The second option is to include it in the June meeting under
“any other business” as a “Request from the Islamic Republic of
Iran”, Mazrouei said, suggesting it will not be on the main
agenda for the ministers.

OPEC governors meet next in October.