OPEC Endorses Iran Exemption from Production Cut2018-12-09Iran managed to secure exemption from an agreement by OPEC members to reduce their oil production to prevent supply glut and bolster the prices.
Members of the Organization of the Petroleum Exporting Countries (OPEC), during their 175th meeting in Vienna on Thursday, agreed to cut their oil output by 800,000 barrels per day in the first half of 2019.
Iran, Libya and Venezuela, given their exceptional conditions, are exempted from the agreement to cut their crude oil output.
Iranian Minister of Petroleum Bijan Zangeneh, upon arrival in Vienna and even before that, had repeatedly insisted that Iran should be exempted from any decision to cut OPEC production because of the US sanctions.
The fifth joint meeting of OPEC and non-OPEC producers was held on Friday, December 7 at OPEC Secretariat in Vienna, with 14 OPEC members and 10 non-OPEC producers.
Russia and other non-OPEC producers will contribute to the production reduction by at least 400,000 b/d for improving oil prices in the market.
Meeting Outcome Serves OPEC, Iran Interests
Iranian Minister of Petroleum Bijan Zangeneh said the outcome of 175th OPEC Meeting served Iran’s interests as well as those of the organization.
Speaking to reporters following the prolonged meeting of members of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna on Friday, the official said Iran was fully exempted from any OPEC output cut agreement, adding the organization would send Iran a separate letter on its exemption from any production cut agreements.
Asked whether he was frustrated by the US trying to influence OPEC decisions, he said, “Yes, we have seen such behavior from the US before. OPEC does not like to be pressurized from outside countries. I just don’t know when the US administration learns a lesson from this manner.”
He described OPEC talks as difficult and complicated. OPEC meeting began on Thursday and the talks took over 10 hours for the group to reach a final agreement on production cuts in a bid to improve the prices.
The member countries agreed to slash the group’s production level by 800,000 b/d.
Asked about Russia’s involvement in OPEC agreement, Mr. Zangeneh said Moscow did not influence the OPEC agreement but its role in non-OPEC producers’ decision to cut their production could not be ignored.
In response to a question on why the talks took too long, he said, “We needed more time.”