Iran rejects crucial OPEC talks as ‘sanctions’, boycotts meeting

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Iran, which has refused to freeze its oil output, declined to attend a crucial OPEC meeting on the oil cartel’s production levels.

Iranian Oil Minister Bijan Namdar Zanganeh said on April 16 that he would not only skip the Doha talks, but would not be a signatory to any deal he said would amount to self-imposed sanctions on Iran, which is restoring crude production after the lifting of international sanctions.

Iranian Oil Minister Bijan Namdar Zanganeh
Iranian Oil Minister Bijan Namdar Zanganeh

Iran has increased output by more than 600,000 barrels per day this month.

Saudi Deputy Crown Prince Mohammad responded by saying the kingdom would not restrain its oil production unless other producers, including Iran, agreed to freeze output at an April 17 meeting in Doha.

“If all major producers don’t freeze production, we will not freeze production,” said Prince Mohammad. “If we don’t freeze, then we will sell at any opportunity we get.”

“A no-show by the Iranians is actually positive for the Doha talks as all know that they wouldn’t agree at this stage,” said John Sfakianakis, director of economics research at the Gulf Research Center.

“A deal can be reached even if Iran for now is absent. The sentiment is still positive as global supply is falling. Iranian participation issue is not significant and will be reconsidered down the road. There is enough momentum with the rest of the members now.”

If no deal is reached a sharp sell-off in the markets is likely to follow, according to Ed Morse, head of commodities research at Citigroup.

The credit ratings of more than 10 oil-producing nations in the developing world were placed on review in March for a downgrade by Moody’s Investors Service, which cited the shock of depressed prices on these economies.

The list includes Russia, Kazakhstan, Nigeria, Angola, Gabon and five of the six Gulf Cooperation Council (GCC) nations – Kuwait, Saudi Arabia, the United Arab Emirates, Bahrain, and Qatar, according to Moody’s.

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