A worker checks the valves at Al-Sheiba oil refinery in the city of Basra, Iraq. (Image Credit: Reuters)

Saudi Arabia’s Opec sway limited by resurgent Iraq and Iran

Together Iraq and Iran produce more than 8mbpd, nearly a quarter of the oil pumped by the group

Dubai: Saudi Arabia’s dominance of the Organisation of Petroleum Exporting Countries (Opec) isn’t what it once was.

Iraq and Iran, shaking off shackles of sanctions and war, have raised oil output to record highs and are asserting themselves within Opec. Together they produce more than 8 million barrels of oil a day, nearly a quarter of the oil pumped by the group, and both want to boost their output further.

The ambitions of Opec’s second- and third-largest producers are the main obstacle to the Saudi-backed effort to trim the group’s output and buoy prices. Even if members reach a deal next week and accept production quotas, the reluctance of Iraq and Iran to cut output bodes poorly for their long-term cooperation with the kingdom — and for stability in global oil markets.

“Iran and Iraq want an equal relationship with Saudi Arabia within Opec,” Jaafar Altaie, managing director of Abu Dhabi-based consultant Manaar Group, said Monday. The two are “in a coincidental collusion in Opec because it suits their common interest of getting as high a quota as possible.”

Opec ministers will meet on November 30 to work out a shared cut in production to between 32.5 million and 33 million barrels a day. Trimming output could help balance an oversupplied market and...Read more...

Source: gulfnews.com