21 May 2024
Thursday 5 December 2019 - 15:09
Story Code : 364900

Iran retains 'Strong Voice' in OPEC ahead of key meeting

AFP | Benoit Pellegrin: Iran, hit by year-long US oil sanctions and recent protests over domestic fuel price hikes, retains a "strong voice" in the OPEC producing cartel which meets this week, analysts say.
The Islamic republic suffers from tumbling output yet remains a significant player in the Organization of the Petroleum Exporting Countries (OPEC), whose 14 nations from Africa, the Middle East and Latin America together pump 40 percent of the world's oil.

Washington had re-imposed sanctions last year on Tehran's exports after withdrawing from a 2015 nuclear deal.

"They still have a strong voice," SEB analyst Bjarne Schieldrop told AFP ahead of this week's gathering of both OPEC and its partners that include Russia.

OPEC descends on its plush Vienna headquarters Thursday and Friday and is expected to maintain output cuts alongside its partnersor perhaps even go deeper.

The cuts of 1.2 million barrels per day from October 2018 levels were originally fixed in December last year and were already extended at OPEC's last meeting in July.

Crucially however, Iran was exempt from the deal, which is aimed at shoring up world oil prices and protecting precious revenues.

Yet the republic's output has been shredded by US sanctions that prevent it exporting oil abroad.

According to OPEC data, Iran produced 2.192 million barrels of crude oil per day (mbpd) in the third quarter of 2019.

That contrasted sharply with the 3.813 mbpd of production which the Middle Eastern nation averaged in 2017.

PVM analyst Tamas Varga told AFP that Iran was suffering as a result of "maximum pressure from the United States.

"Oil export exports are falling," he added.

At the same time, some OPEC nations like Iraq and Kuwait have been able to keep their own output levels unchanged despite the cartel's pact, Schieldrop said.

"The situation is unfair seen from Iran's side," he told AFP.

Meanwhile, Iran's regional rival Iraq has not curbed its output, instead exceeding its own quota despite criticism from OPEC's de-facto leader Saudi Arabia.

In the absence of US sanctions on Iran, oil prices would currently be trading far lower, according to Schieldrop.

"If that was not happening, we would have very low prices today," he noted. Irana founding OPEC member which sits on the world's fourth-biggest oil reserves and second-largest gas reserves -- still retains its authority within the cartel.

It has been vocal critic of Russia's increasingly powerful role within the so-called OPEC+ grouping.

But analysts note that Iran now faces social unrest linked to the impact of US sanctions.

Protests broke out across the country from November 15 and were ignited by a price hike on fuela heavily subsidized commodity in Iranas part of an effort to ease pressure on the sanctions-hit economy.

"Iran is suffering economically and socially," Varga said.

Videos emerged this week showing harrowing scenes of bleeding protesters, burning roadblocks and snipers on rooftops after Iran lifted a near-total internet blackout.

The footage has opened a window onto what analysts say was one of Tehran's bloodiest crackdowns.

Many videos from some of the estimated 100 areas where demonstrations erupted appear to show security forces firing at close range at unarmed demonstrators or beating them with batons.

Meanwhile, The US State Department announced that Secretary of State Mike Pompeo would meet Wednesday in Portugal with Israeli Prime Minister Benjamin Netanyahu, who was expected to call for increased US pressure on the "tottering" Iranian government.

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