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2018-09-21 10:35:00

OPEC-NON-OPEC DECISIONS

OPEC-NON-OPEC DECISIONS

SHANA - Iran's Minister of Petroleum Bijan Zangeneh said the Joint OPEC/Non-OPEC Ministerial Monitoring Committee (JMMC) is not legally competent to make decisions about adjustment of production quotas.

In an interview with Platts and Bloomberg in Tehran, he said that "all decisions will be adopted only in the OPEC oil and energy ministers' meeting in the presence of all member states and based on unanimity."

The interview was carried out ahead of September 23 JMMC meeting in Algeria.

Will you attend the JMMC meeting next week?

I'm not going (to the meeting). Mr Kazempour, will head the Iranian delegation in Algeria.

But Iran's position in terms of the current agreement, for the decision that will be made in the ordinary meeting, what does Iran want to say in Sunday's meeting

We believe that this meeting doesn't have any decision-making rights. The JMMC doesn't have the authority nor is it legally qualified to reach decisions, not on any issue. Its observations aren't determining either. It only observes and monitors and it's just watching, observing and it gives a report in the meeting exclusively for the ministers meeting. The JMMC has no right to make any decisions. I'm going to say something now in general about OPEC, they've made something called the Declaration of Cooperation, we celebrate it and appreciate it a great deal. Especially the non-opec members that have joined us in the past two years, especially Mexico and Russia, who have worked with us and have really helped us stabilize the market very much. But, the DoC is not supposed to replace OPEC.

My analysis now is that OPEC is the victim of a creeping situation that's a result of both cooperating with the U.S. and fear of the U.S. NOPEC bill. They are sacrificing OPEC, they are destroying OPEC and slowly, slowly, without directly saying so, they want to gather some names together to create a forum to replace OPEC.

We never believe in the idea that you should commit suicide for fear of death, we'll carry on what we're doing. In the nearly 60 year life of OPEC this sort of thing has happened 10 times or more and there will be more ups and downs. You mustn't just sacrifice OPEC out of fear — OPEC is one of the third world's biggest accomplishments in my view, not just in terms of oil producers, but it's an organisation that can be effective in the world's economy and it's a good, strong foundation.

And so there are some who want dismantle this and they want to make this thing [JMMC] much bigger than it is, out of proportion, pointlessly. If you pay attention you'll see they are making this OPEC/non-OPEC meeting into a big deal whereas it's not important. This entire story around OPEC and non-OPEC was about cutting 500k barrels. The restof the countries, they haven't cut anything. In fact, they didn't have production capacity. Look at those countries who cooperated with us. We are thankful that they've cooperated politically and sympathised with us, but they all produced under their quotas and that's why some of them, their compliance reached nearly 200 percent and 180 percent. They couldn't produce at all. Apart from Russia and to some extent Mexico.

Russia has helped a while and they're not our problem in this situation right now, they helped and then that period will expire, and they can cooperate as much as they want based on their own interests as a country that's a non-OPEC producer. But from the OPEC countries I have higher expectations, and particularly in the current situation — and I've said this many times before — it's not appropriate that two members start leading and taking on the leadership of an anti-Iranian current.

(You mean UAE and Saudi?)

I'm not mentioning any names at all. But the two members of OPEC are taking the helm of global anti-Iran campaign in the oil makret, this is completely obvious and it's not right. It's not right as neighbours nor as cooperators. They take on this anti-Iranian tide and then they also take onboard cooperation with America in order to hurt Iran, and then they pull some non-OPEC members along with them who don't necessarily understand the depth of the political complexity and the other aspects that I don't want to explain here...

For instance they will say something like 'we won't let there be a shortfall in the market', which on the surface is a very good thing to say or is economic. But in my opinion such a statement has nothing to do with economics and is 100 percent political and against Iran. Anyone who says they will compensate for the shortfall in the market, is speaking against Iran. And it's a political statement, I do not see this as economical. There's no economics in it. And they are, contrary to what they say, they're actually drawing not only OPEC but also non-OPEC countries into a political game. But because this political game is one that is working in tandem with U.S. policies, some people don't want to speak up about it.

No, OPEC and some non-OPEC countries are working in line and with moving along the approach of the U.S. Unfortunately a part of the secretariat is also moving in this direction and we realise this. And I want to notify the Secretariat hereby to be careful about its work, a part of its works, and remind them that OPEC is an independent organization, it is not a subsidiary of the Department of Energy of the United States, its officials must pay attention to this.

What matters is the members will. We don't have big members or small members, everyone is equally participating and they have to take everyone into consideration. And my main issue is that, inflating the JMMC meetings — and I was head of the OPEC's Ministerial Monitoring Committee for eight years at one time — they never had all this fuss and noise before.

Even so, even with non-OPECs, they don't make much of a difference anyway.

(You have spoken very positively of Russia. But apparently, Russia and Saudi Arabia are together...)

Zanganeh interrupted the question:

"I said before. Some have complicated political objectives, which they express it in simple, economic terms. While, they are not economic at all. When they say 'we will sort it out [oil shortage in market],' any wise person says 'that's right, demand and supply should be balanced naturally. But if you look at it a bit closely, it is not an economic argument. It means a signal to the US: put as much as pressure you want on Iran, and we won't let the market face any problem. This is what we should get. This is a political message. I don't believe that Russia wants to cooperate with the US and blow a strike to us. But some others do.

(What's the JMMC's role in pursuing the US will?)

". It is not to make a decision or determine or distribute quotas... a group here has made up something against Iran and assume that they can succeed. These are bad intentions. I tell them that it's not appropriate what they do,"

(Have you talked with other OPEC members and Russia to help reverse these moves that are in line with the US objectives?)

"I don't say that Russia is acting in line with the US objectives. Russia is big enough not to do so. But some might take advantage of Russia's cooperation. I have contacted some of the ministers, talked to them, wrote letters and explained to them, recently. I drew their attention to this issue.

(Only to OPEC members?)

"No. Outside OPEC too,"

(You have written some letters to OPEC secretary general about some members not abiding by the agreement)

"Yes. They are violating and they want to bring OPEC on board and pursue their illegitimate works. They are both overproducing and insinuating a wrong understanding from OPEC agreement. If they want to produce excessive, we cannot stop them. There is no forcible instrument in OPEC. But they shouldn't do it in the name of OPEC. They should come out and say 'the US has phoned and told me to increase output. And I have no other way but to do so.' Today, some of these countries tell us 'oh we cannot take much more oil from you [Iran]. Please understand us. We have long relation with US and we can't ignore what it wants.' Ok! We don't want to fight with each other. But don't say it's what OPEC said [decided]. They should say it's their own decision because they can, it is what it is, take it or leave it. They should say 'we increase the production because we can and we don't listen to anyone. I can't stand against the US. But don't put it on OPEC. And I think that is why they are destroying OPEC.

(Are you worried about OPEC as a founding member?)

"Yes. We are worried but rather about Iran itself. I want that organization for Iran, not the other way around. We established an organization, from which the third world has benefitted so far. It still can play a role. But the world changes. It has developments. We shouldn't forget one principle which is power. Influence comes from power, not reasoning. This is very important...

"OPEC has ups and downs... OPEC basically makes sense when it cuts output. When prices are high and the market is demanding, everybody does what it wants. OPEC is meaningful when it wants to cut production in order to raise prices. There, it is influential,"

"What I mean is that if we are not careful, we will be digging OPEC's grave with our own hand,"

(Have the ministers to whom you wrote responded yet?)

"No. The letters are reaching them,"

(Do you think Saudi Arabia and Russia can produce more than the amount they have pour into the market so far?)

"Some countries are relying on their inventories. They give some numbers for their inventories but I don't know if it is true or not. I don't know these inventories that Saudi Arabia says it has outside the country and elsewhere are real or not. But from now on, I think, they will rely on their inventories to pour into the market not production. I think they don't have extra production capacity. But eventually, it won't last long. No international analysis say that missing Iran's oil can be tolerated in a long run.

(Iraq is increasing its output...)

"No, it can't. Iraq hasn't increased its production. It is a long while that its production has stayed fixed. There is a reason,"

"I don't talk about production, neither about its figure, the exports, destinations. I won't say a word because the Americans have assigned resources, civil forces, not military ones, in many ports and countries and they are controlling, watching and carrying out an intelligent monitoring. They watch our people. I don't want to give them additional information,"

"I don't want to brag today for them, neither do I want to explain my countermeasures. I don't want to say how much we produce. These all would help them to obtain free information. I am not going to give them that. The oil industry is working with full force. I won't give information. We will see eventually,"

(Do you confirm 35% down exports since April?)

"I don't give any figure,"

(What about tankers and shipment, buyers?)

"I don't give any information. Whatever I say, the US will take advantage of it against us. It is like 'anything you say may be used against you in a court of law," he said with a smile.

"I won't reveal what customer, what destination, what countries, with which tanker I ship oil, how I solve my insurance problem,"

"I won't give any information. And you can write that down.

(Can you say who the buyers are?)

Nothing. Look if America finds out ... anything that could work in favour of the U.S. — I won't talk about it. They will use whatever I say against us.

"I'm not going to say which customers, which vessels I'm using or how I send it or how I solve my insurance problems. I'm not going to talk about these because it works to their advantage.

(If the forthcoming JMMC meeting reaches a decision that's outside the authorised proposal — does OPEC have an approach on what to do ...)

It's void. It's invalid, it's a void decision. Such a decision is illegal. The JMMC has no decision-making rights. I will say this, that in general the JMMC has no right to make decisions. Any decisions are invalid. It can only observe and report. Decisions can only be made at OPEC meetings in the presence of all OPEC members and by consensus of members.

The place for decisions in at OPEC. This [JMMC] is monitoring only. All this fuss, advertising, promotion and placards — this is just to propagate for pulling OPEC apart.

(If the JMMC enters the ministers meeting at OPEC...?)

Well, ok. Without a moment's hesitation, I will definitely veto any decision that threatens our national interests. Without a moment. Vetoing means that that decision isn't legal ,it's illegal if there's a veto

(So right now you won't be at Algiers, if they make a decision)

They can't. There's no OPEC at work there.

(You will veto any decision that comes to OPEC?)

I said that any decision that poses even the smallest danger to our national interest, without any hesitation at all, I would stand in its way. I'm there for my own national interest alongside everyone else, everyone is like this.

(What are your views on this current agreement and it's continuation?)

The agreement doesn't really exist anymore. It's finished. Russia came long, cut 300k barrels and then got that 300k back then it's over. There's no agreement left really. I talk to OPEC. I don't have much to say to non-OPEC.I am addressing OPEC. I respect their [non-OPEC] cooperation in the future, but it doesn't need all this propagated meeting, logistics and spending.

(So in the December if they day that they want to renew/continue this agreement, what will your position be?)

We'll discuss it then.

(Do you want a permanent seat on the JMMC?)

No. Not for something that's just observing and monitoring and only monitors, why would I need that. All my time and efforts and those of my colleagues is being focused right now on this economic war that America has started against us.

(Do you think the way that OPEC members, Saudi and Iraq in terms of production increase, do you agree that they are using OPEC as a political tool?)

I said that some OPEC, I haven't mentioned any names. I've said some OPEC members, contrary to everything that they've said themselves and contrary to their own motto against politicizing OPEC, they are actually politicising the entire organization in order to execute the will of the U.S. And they are laying the groundwork for them (U.S.). When they say 'we have no problem in securing the market' what they mean is, 'come on Mr. America, sanction Iran as much as you want and destroy the people of Iran and it's not a problem, we are by your side'. Politically, this is what it means. It's cooperation with the U.S. in sanctioning Iran.

Anyone who says this is cooperating with the U.S. Whoever says it, whoever at all, says 'we will make-up for any shortfall in oil' is going along with the Americans and is giving a greenlight to the Americans to sanction Iran, to exacerbate Iran and to deepen sanctions against Iran

(Have there been any new agreements with Russia?)

There are always new agreements.

(In relation to oil exports or anything)

On exports, as I said, I won't say anything.

(So there are new agreements or they are in the process of being made, or they've been signed?)

Now, it's good. We've moved forward.

(In the time that there's been this agreement, has any share of any OPECs gone to non-OPECs?)

Look, OPEC won't give any share of anything to anyone. Persian Gulf countries won't give-up a single barrel of their market share to anyone, unless they cannot produce.Even what they cannot produce, that they won't give that up either. Practically they don't have it in hand, maybe they'll tell the other side, we [give it] to you] but they haven't been able to use it themselves. If there's food that they can't eat, maybe they'll donate it somewhere. But they won't even let one barrel go.

(If you accept that Iran's oil production will drop or it's exports will drop, will we have negotiations with OPECs beforehand like we did in 2013 and 2014 for the return of Iran's barrels to the market)

No I've already written to them that, firstly exports aren't part of OPEC's criteria, only production. And I've written before, for this next meeting, that if anything happens to my exports or my production, after the differences have been resolved, regardless of any decision, without the need for any approval at all, I will return to my original production. Without the need for obtaining any approval I will return to my prior production. I've told this to OPECs and I've said it again.

(How do today's sanctions and situation differ from the situation in 2011?)

Well it was UN Security Council sanctions then. This is just the bullying of the U.S., at that time it was multilateral, international sanctions. Right now, no country apart from Israel and two other countries in the region — two of our Arab brothers — no one else is with the U.S.

(But they are cooperating ...)

No. Cooperation... if you're bullying and holding a sword it is something else ... but these sanctions are not legal and it's not like everyone is afraid of the UN and contravening some laws.

Right now, from one perspective it's harder and from another perspective it's simpler. It's harder from this point of view that the U.S. has all the experience of the previous time, and it's already worked out some of our methods/workarounds and therefore we have to use more complicated, new methods and the U.S. is a lot more persistent, especially given the U.S. have made up its mind to cut out production to a great extent in November even if in a symbolic way. In my opinion this is very symbolic for them.

And we are doing all that we can, making all efforts and I don't want to say how much and to what extent we've been successful, because he (U.S./Trump) will find out. That [previous] round was UN-related, UN sanctions are very heavy in terms of the law, meaning that anyone who violated the sanctions was subject to all the international laws and regulations. Now this is just America that is throwing its weight around, it's holding up a sword and calling for challenge over everyone. And now, we'll do what we can do and God Willing, God will help us if we are honest.

(Rick Perry, Falih and Novak met recently, do you think this was just promotional/propaganda or how much was it about affecting production?)

No I think this is all mostly propaganda. The Americans routinely go to different places, following, threatening, they go here and there and doing whatever is that they do and we know about what they do. Any company that contacts us, they contact them half an hour later, they talk to them, they routinely monitor and eavesdrop and follow and keep an eye on our managers. They are clearly following everything.

(What's your analysis of the current state of the market and in the months ahead, considering winter is ahead, what does the market need? More barrels?)

You have to understand from price change trends. The Americans are trying really really hard to prevent prices from going up until November. But if you take a look, the trend for prices right now is upwards and they bring prices down with an intervention. But if they leave it alone, the price trend is to rise and to keep rising.

(What's a suitable price for oil right now?)

Right now, a suitable price is $80. Now, the higher it gets the better it is for us. But it won't. The U.S. and some OPEC members are not allowing it through their meddling.

(Some sources have said that Saudis want high prices above $80)

No, not right now.. The U.S. doesn't want WTI to go up, if it goes up Trump won't get the votes... hey're putting all their efforts into WTI not going up. He brought it under $60 and now it's going up. As soon as it goes up, they throw in some from storage, from here and there and they won't ever tell the truth about what they're doing. But the DOE report on production said that the market cannot sustain Iran's absence from the market. It cannot tolerate Iran's removal from the market.

(Do you think that if production really drops heavily, how much will the price of oil go up? In the worst case scenario)

The higher it gets, the better.

(What needs to happen for these sanctions ... what has to happen, does Mr. Trump have to go? What will and needs to happen in your opinion, what can Iran do? Iran has to do something)

Right now, I don't want to enter these discussions.

(Well something has to be done, Iran can't just keep going till it hits a dead end?)

Now Trump could do so and it would be good for him to suspend the sanctions.

(In Vienna I remember you saying in terms of Russia's oil supply, we're neither friends nor enemies — is that still your view?)

It's always my view. It's not about being friends, brothers or enemies.

(And Russia, what's your view on the fact that it says on the one hand it's against the sanctions but then on the other hand it will secure oil supplies?)

Ask them, you need to ask them.

(Can you say where the Iraq-Iran swap is at?)

It's underway. it's coming on truck and it's being received.

(Do you want to increase it?)

Yes, we would like to and we are after increasing it.

(and in terms of sales of oil to Russia, are you seeking more than the current level [100k]?)

We are keen to provide more oil to everyone.

(Is Iran using discounts more now, as a tool?)

No it's not really that important

(So what is Iran's position on the current agreement, will you support it?)

We'll see at the time.

(Would the US be able to reduce Iran's oil exports to zero or it's just a bluff?)

I think that Mr Trump has made such decision without consulting experts even within the US administration to reduce Iran's oil exports to zero and he insists obstinately on implementing his decision. But he recently realized that such decision is impossible and therefore he is seeking to reduce Iran's oil exports to zero, albeit symbolically, for one month. Therefore, Mr Trump is seriously trying his best to reduce Iran's oil exports to zero. Of course this is just one side of the coin as we have not our hands and feet tied. In addition to making our best efforts we believe that divine hands are at work.

-----

Earlier: 

IRAN'S SUPPLIES COMPENSATION
2018, September, 17, 15:15:00

IRAN'S SUPPLIES COMPENSATION

REUTERS - Saudi Arabia, the United States and Russia can between them raise global output in the next 18 months to compensate for falling oil supplies from Iran and elsewhere, U.S. Energy Secretary Rick Perry said on a visit to Moscow on Friday.

 

 
 IEA: OIL PRICES COULD RISE
2018, September, 14, 12:40:00

IEA: OIL PRICES COULD RISE

IEA - If Venezuelan and Iranian exports do continue to fall, markets could tighten and oil prices could rise without offsetting production increases from elsewhere.

 

 IRAN'S ECONOMY DIFFICULTIES
2018, August, 27, 14:25:00

IRAN'S ECONOMY DIFFICULTIES

ARAB NEWS - One of the key markers of Iran's economic crisis has been the collapse in the currency, which has lost around half its value since April.

 

 U.S. - IRAN SANCTIONS
2018, August, 27, 14:15:00

U.S. - IRAN SANCTIONS

REUTERS - The lawsuit filed with the ICJ says the U.S. sanctions, which are damaging the already weak Iranian economy, violate terms of a little-known friendship treaty between the two countries.

 

 IRAN VS OPEC QUOTAS
2018, August, 10, 10:35:00

IRAN VS OPEC QUOTAS

PLATTS - Saudi Arabia pumped 10.63 million b/d in July, according to the latest S&P Global Platts OPEC survey, far above its quota of 10.06 million b/d, though kingdom officials say their July output was 10.29 million b/d. Russia produced 11.22 million b/d in July, according to official data, basically erasing its 300,000 b/d pledged cut.

 

 IRAN'S DEVELOPMENT BY GAZPROM
2018, July, 25, 10:00:00

IRAN'S DEVELOPMENT BY GAZPROM

SHANA - A non-disclosure agreement was signed last year between Iran's OIEC and Russia's Gazprom Neft for the development of the Azar and Changuleh oil fields. The agreement was endorsed by the National Iranian Oil Company (NIOC).

 

 SAUDI ARABIA - IRAN RESOLUTION
2018, July, 16, 10:55:00

SAUDI ARABIA - IRAN RESOLUTION

PLATTS - "The shift from reporting individual country conformity to reporting overall conformity will be adopted to reflect the June 23 decision of the 4th OPEC and non-OPEC Ministerial Meeting that countries will strive to adhere to the overall conformity level, voluntarily adjusted to 100%, as of July 2018," Saudi energy minister Khalid al-Falih wrote to his counterparts Thursday in a letter.

Tags: OPEC, RUSSIA, SAUDI ARABIA, IRAN, USA, OIL, PRICE

Chronicle:

OPEC-NON-OPEC DECISIONS
2018, December, 14, 08:55:00

GERMANY'S RENEWABLE: 38%

PLATTS - Renewables' share in Germany's power mix is set to reach 38% this year, ahead of the government's 2020 target of 35% but below-trajectory for 2030's 65% target, utility lobby group BDEW said Thursday.

OPEC-NON-OPEC DECISIONS
2018, December, 14, 08:50:00

EBRD DECARBONISATION STRATEGY

EBRD - the Bank will no longer finance thermal coal mining or coal-fired electricity generation. The Bank will also stop funding any upstream oil exploration, and will not finance upstream oil development projects except in rare and exceptional circumstances, where such investments reduce greenhouse gas emissions.

OPEC-NON-OPEC DECISIONS
2018, December, 14, 08:45:00

MALAYSIA'S GDP UP BY 4.7%

IMF - The Malaysian economy has shown resilience. Real GDP growth is projected at 4.7 percent for 2018, underpinned by domestic demand.

OPEC-NON-OPEC DECISIONS
2018, December, 14, 08:40:00

BOLIVIA'S GDP UP BY 4.5%

IMF - Bolivia's real GDP growth is projected at 4.5 percent in 2018, one of the highest rates in the region. Growth is supported by continued accommodative policies, a second economy-wide wage bonus, and strong agriculture output.

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