Economy

Iran: OPEC Needs Collective Wisdom to Defend Interests


The Organization of Petroleum Exporting Countries (OPEC) needs collective wisdom to defend its interests, said a senior Iranian oil official.

Iranian Oil Ministry Spokesman Alireza Nikzad Rahbar made the remarks in comments about the possible release of strategic oil reserves by the US and other International Energy Agency (IEA) members.

Rahbar, who was speaking to Shana, said OPEC needs to deal with this issue based on collective wisdom and necessary consultations and coordination among members.

Rahbar said Iran should act based on collective wisdom that in turn requires an active diplomacy not only in the influential organization, OPEC, but with oil producing countries outside the organization in order to defend the interests of oil producing countries; an issue that is on the Oil Ministry’s agenda.

“OPEC Secretariat will monitor all the developments and Iran’s governor for OPEC will be in contract with the organization so if western countries decide to release oil from strategic reserves, we will response based on collective wisdom,” the official noted.

“Like consuming countries who pursue their economic interests, oil producing countries should reach consensus on defending their interests in oil markets,” Rahbar said.

Elsewhere in his remarks, Rahbar said, “On the verge of holding presidential elections in the Unites States oil price is one of the essential parameters for voters and that is why Barack Obama’s administration has decided to manage rising oil prices issue.”

Referring to political developments across the globe, including tensions in Syria and the Israeli regime’s intensified war rhetoric against Iran, Rahbar said, “These developments led to surging oil prices therefore the US plans to harness the market through releasing strategic oil reserves and prevent not only any disturbance in the process of presidential elections but to prevent devaluation of dollar and keep the country’s economic ranking steady through a kind of multi pronged strategy.”

The official noted that OPEC members decided to maintain output ceiling unchanged in their 161st meeting in Vienna at 30 million barrels per day, adding OPEC production is 1.5 to 2 million barrels above the ceiling which is the result of ignoring the agreements by some OPEC members.

On Friday, Reuters quoted an official at the offices of President Francois Hollande as saying that France and the United States were in contact on recent oil price rises and were studying all options including a possible release of strategic oil reserves.

“We are consulting our American partners on all issues, including containment of oil prices. All options are being studied,” the official, speaking on condition of anonymity, told Reuters.

US officials are monitoring the oil market to judge in coming weeks whether a release of oil reserves might be needed to curb the recent rise in prices, a source with knowledge of the situation said on Thursday.

A release of France’s strategic oil reserves would be a change of tack for the French president, whose energy adviser during the presidential campaign said Hollande would oppose a drawdown of emergency inventories because it would leave France vulnerable in case of a major supply crisis.

Hollande had proposed instead to freeze retail fuel price increases for three months, but the lower oil prices he found when he took office in May meant no action was immediately taken.

However, the recent fuel price rise, coming at a time when the French economy is struggling to avoid a recession, forced Finance Minister Pierre Moscovici to announce on the radio that the government would unveil unspecified measures at the end of August if prices continued to swell.

Brent crude oil prices have risen by more than a third in less than two months on worries that conflict over Iran’s nuclear program could lead to war, disrupting oil supplies from the Middle East.

With the oil price rally coming at a time when world economic growth is slowing, dampening demand for fuel, and with oil supplies ample, many investors feel the recent price rises have been overdone.

But the fall in the euro against the dollar in the last few months means the pain is particularly acute in the euro zone, with oil prices in euro terms reaching levels unseen since their 2008 peak.

In May, the IEA, the West’s energy adviser responsible for coordinating reserves, was put on standby for action. No one at the Paris-based agency was immediately available for comment on Friday.

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