Iran says it has been exempted from the OPEC production cut extension after the organisation agreed to hold current crude level for the next nine months.
“Like the previous meeting, I was waived from the agreement on extension of production cut,” said Iran’s Petroelum Minister Bijan Zanganeh, adding that Tehran’s demand was fulfilled at the OPEC’s Monday meeting in Vienna.
The deal extends existing output cuts of 1.2 million barrels per day, or 1.2% of global demand, until December 2019 or March 2020.
Earlier, the Iranian minister had called for unity among 14 member states in the wake of what he called "unilateralism" in the Organisation of Petroleum-Exporting Countries (OPEC).
He was referring to a shift in OPEC decision-making process through OPEC+ (Saudi Arabia and Russia).
Russian President Vladimir Putin said on Saturday, two days before the OPEC meeting that he had agreed with Saudi Arabia to extend existing output cut.
OPEC+ charter
“The OPEC final statement clearly states that the charter won’t have effects on OPEC decisions and operational mechanism,” Zanganeh told reporters following seven hours of deliberation over the OPEC+ charter.
OPEC’s 14 members control 35 percent of global oil supplies and 82 percent of proven reserves. With the addition of the 10 Non-OPEC nations, notable among them Russia, Mexico and Kazakhstan, those shares increase to 55 percent and 90 percent respectively. This affords OPEC+ a level of influence over the world economy never seen before, according to an Open Markets’ April report.
The cooperation between OPEC and non-member nations was formalized in late 2016 under a joint pledge to cut production by 1.8 million b/d (1.2 million b/d from OPEC and 600,000 b/d non-OPEC), Forbes reported June last year.
Zanganeh stated that the financial revenues of cooperation between OPEC and Non-OPEC countries has to be decided separately and repatriated among member states. “So, OPEC doesn’t bear new burden,” he noted.
OPEC+ president and vice president will be rotatory, according to the Iranian minister.
Iran has been a major critic of the cooperation but with charter modification Tehran has been convinced a little bit.
Zanganeh predicted that Iran will not oppose the charter intended to formalize its oil market coordination with Russia and nine other non-OPEC partners.
“OPEC and Non-OPEC cooperation is completely voluntary and as it’s not binding I think the Iranian government accepts it,” he told the media.
The OPEC+ meeting is set for Tuesday, after the official OPEC meeting.