The next meeting of Oil Basket Price (OPEC) is being held on 2nd June and sources familiar with the meeting is assuming it as just another altercation between Saudi Arabia and Iran.
Interactions by OPEC became direct altercations between Saudi Arabia and Iran and others being mere spectators, it seems. The next meeting on June 2nd will be on the backdrop of $50 prices of petrol per barrel and turmoil in Venezuela and Saudi Arabia operating new oil ministers. Iran as well aggressively bringing itself closes to before its sanction era. There is sharp drop in production of Nigerian oil fields due to sabotage.
OPEC Oil Basket Price (OPEC) is under the lens this type about its unity because as per OPEC official, “Will there ever be any minister who carries same weight as Naimi? New Saudi oil minister Khalid al- Fahih will be attending his first meeting this time. However, experts doubted whether he will continue same kind of work as outgoing Saudi oil minister Ali bin Ibrahim Al-Naimi? Only time will tell this.
In his “Vision 2030” strategy Prince outlined that priority is to list state owned oil company Aramco. It seems that Saudi’s will aggressively try to dominate the OPEC and keep all oil producers on toes for the Aramco listing. New Saudi Aramco chief executive officer Amin Nasser hinted about it to correspondent. Mr. Nasser also asserted that whatever the outcomes of the meeting and discussions on Saudi Aramco listing, we will meet. According to Financial Times report productions will increase in 2016.
Iran had initially asserted about freezing of oil productions once, it reaches target of 4 million bpd. But heighten tensions between Saudi had no signal of going forward with the plan. Amir Hossein Zamaninia, Iran’s deputy oil minister for International affairs asserted in an interview with The Wall Street Journal, “Our main competitor is Saudi Arabia”. So far Iran has started offering large discounts compare to Iraqi and Saudi oil prices to Asia, which has resulted in gaining significant market share for Iran. Iran also has increased its production capabilities and it is quickly inching towards reaching its target output of 4 million bpd.
OPEC seems to be in difficult situation at this moment. As per Mr. Zamaninia, “Increased politicization of OPEC is disapproving for Iran.” In the southern Persian Gulf, oil has become political commodity instead of economic commodity. Experts feel that without solutions to Syria and Yemen forward agreement doesn’t seem to be taking place.
Dubai based RAK petroleum’s Amir Handjani who is member of the board of Directors said that, “Mohammed bin Salman not just wants to confront Iran but whole energy market as such.” It is also unlikely that Prince Salman will take back seat and on the other side, it is certain that Iranian will also not going to hold back themselves.
According to Hellanic Shipping News reports, the smaller nations became just spectators without any authority whatsoever and just now have to think about glory days coming back. However, it doesn’t seem to be in sight at least in near future.
While two nations continue to compete each other on all the grounds in OPEC, it is uncertain about outcome of the next meeting and what future lies ahead for the OPEC nations? Let’s hope for the best.