• 45 mins Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 5 hours Russia, Saudis Team Up To Boost Fracking Tech
  • 11 hours Conflicting News Spurs Doubt On Aramco IPO
  • 12 hours Exxon Starts Production At New Refinery In Texas
  • 13 hours Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 1 day Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 1 day Oil Gains Spur Growth In Canada’s Oil Cities
  • 1 day China To Take 5% Of Rosneft’s Output In New Deal
  • 1 day UAE Oil Giant Seeks Partnership For Possible IPO
  • 1 day Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 1 day VW Fails To Secure Critical Commodity For EVs
  • 1 day Enbridge Pipeline Expansion Finally Approved
  • 2 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 2 days OPEC Oil Deal Compliance Falls To 86%
  • 2 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 2 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 2 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 2 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 3 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 3 days Aramco Says No Plans To Shelve IPO
  • 5 days Trump Passes Iran Nuclear Deal Back to Congress
  • 5 days Texas Shutters More Coal-Fired Plants
  • 5 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 5 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 6 days Chevron Quits Australian Deepwater Oil Exploration
  • 6 days Europe Braces For End Of Iran Nuclear Deal
  • 6 days Renewable Energy Startup Powering Native American Protest Camp
  • 6 days Husky Energy Set To Restart Pipeline
  • 6 days Russia, Morocco Sign String Of Energy And Military Deals
  • 6 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 6 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 6 days India Needs Help To Boost Oil Production
  • 6 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 6 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 7 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 7 days District Judge Rules Dakota Access Can Continue Operating
  • 7 days Surprise Oil Inventory Build Shocks Markets
  • 7 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 7 days Syria’s Kurds Aim To Control Oil-Rich Areas
  • 7 days Chinese Teapots Create $5B JV To Compete With State Firms
Alt Text

UK Oil And Gas Costs To Rise 100% If Brexit Fails

Brexit negotiators’ failure to secure…

Alt Text

Goldman Sachs: Inventory Drawdowns Will Not Continue

Goldman Sachs has reported that…

What Does The Next OPEC Meeting Have In Store?

Al Falih

The next OPEC meeting on the 2nd of June will act as little more than a forum for continued altercations between Saudi Arabia and Iran

The 2 June 2016 OPEC meeting will be held amid a backdrop of oil prices near $50 per barrel, a sharp drop in Nigerian production due to sabotage, turmoil in Venezuela, Saudi Arabia operating with a new oil minister, and Iran aggressively pumping close to pre-sanction levels.

OPEC interactions have become a direct altercation between Saudi Arabia and Iran, with the remaining members reduced to mere observers.

The new Saudi oil minister, Khalid al-Falih, will be attending his first OPEC meeting, but experts doubt he will have the same clout and skills as the outgoing Saudi oil minister, Ali bin Ibrahim Al-Naimi. Related: Oil Slips After EIA Reports 1.3M Barrel Build

“OPEC’s unity is now in the spotlight more than ever,” said an OPEC official. “Would we ever see a minister that carries the same weight as Naimi? I don’t think so, especially as it is clear now that decisions are in the hands of the deputy crown prince,” reports The Wall Street Journal.

The Prince outlined his strategy in “Vision 2030”, and a major step in that direction is the listing of the state-owned oil company Aramco.

In order to gain additional traction for the proposed listing, the Saudis will continue their aggressive stance in OPEC, and keep all the oil producers on the hook, a glimpse of which was given by the new Saudi Aramco Chief executive Amin Nasser.

“Whatever the call on Saudi Aramco, we will meet it,” Mr. Nasser said. “There will always be a need for additional production. Production will increase upward in 2016,” reports The Financial Times.

Though Mr. Nasser did not hint at the percentage increase, even a small increase will add to the supply glut, because Aramco produces around 9.54 million barrels per day (bpd). Related: Are The Saudis Facing A Full-Blown Liquidity Crisis?

On the other hand, its adversary—Iran—has quickly ramped up production to 3.56 million barrels per day and is on course to reach its targeted output of 4 million bpd.

Iran has increased its market share in the excess supply environment by offering large discounts, undercutting the Saudi and Iraqi prices for their deliveries to Asia.

Though Iran had initially hinted at joining any production freeze once it reached its target of 4 million bpd, the heightened tensions with Saudi show no signs of abating.

“Our main competitor is Saudi Arabia,” Amir Hossein Zamaninia, Iran’s deputy oil minister for international affairs, said in an interview with The Wall Street Journal.

Mr. Zamaninia said Iran disapproves of increased politicization of the OPEC. “In the Southern Persian Gulf, oil is becoming a political commodity, more than an economic commodity,” he said. “OPEC is in a difficult situation.”

He said that without solutions to the conflicts in Syria and Yemen, an agreement is unlikely. Related: Who Will Benefit From The Electrification Of Transport?

The relations between the two warring nations have reached a new low, with Iran refusing participation in the Hajj pilgrimage. The negotiations between the delegates of the two nations ended in conflict.

Considering the existing tensions between Iran and Saudi Arabia, if the OPEC meeting ends without a fight, it should be considered an achievement.

The proposal by the Kuwaiti deputy foreign minister Khaled Jarallah for the member nations to freeze production is a feeble attempt to support prices.

“It is clear that Mohammed bin Salman wants to confront Iran not just in the Middle East but in the energy markets,” Amir Handjani, a member of the Board of Directors of the Dubai-based RAK Petroleum, told RT. He said that it was unlikely that Prince Salman will back down now. “And certainly the Iranians are not going to back down either,” reports Hellenic Shipping News.

While these two nations continue their slugfest in the OPEC meeting, the smaller nations have no choice but to remain mute spectators, dreaming of their glory days.

By Rakesh Upadhyay for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • SilberShark110 on May 19 2016 said:
    The kingdom is dependent on oil exports and fully 90% of revenues come from oil and gas. Clearly the kingdom is dependent on oil revenues in the same way that an infant is dependent on it's Mother's Milk.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News