Saudi Arabia, UAE "Draw The Death And Collapse Of OPEC"
Among the many threats that Iran has published since the US imposed sanctions on Iran, Iran has now reported the collapse of OPEC if OPEC members fill the gap by turning off market shares not filled with Iran and Venezuela, according to for S & P Global Platts.
Iran's oil minister said two OPEC members just did it and accused them of using the oil as a weapon. The two members Zanganeh referred to were Saudi Arabia and the United Arab Emirates.
It is interesting to note that both Saudi Arabia have wrongly taken the burden of cutting production. Saudi Arabia has agreed to keep production at 10,311 million barrels per day, while UAE's target is USD 3,072 million.
Saudi Arabia has overachieving its share of production cuts and produces 9.794 bpd in March. Similarly, the UAE produces closer to the target, but is still below 3,059 for March.
The oil weapon, to which Iran refers, according to S & P Global Platts, is their contact with the United States to come up with a plan to ensure that the oil market is well-fed. So far, Saudi Arabia has not increased its production to fill any voids left by either Iran or Venezuela.
"By using oil as a weapon against two founders of OPEC [Venezuela and Iran][they] OPEC makes solidarity to division and drawing the death and collapse of OPEC," said Zanganeh, and warning that any country using oil for this purpose should "accept" the consequences. " Related: The Beginning to End for British Shale Gas
Iran and Venezuela have actually had declining oil production, as sanctions in both countries restrict exports and cut out buyers like India, South Korea and Cuba who had to trade elsewhere to get enough crude oil.
Venezuela's oil production fell below 1[ads1] million bpd in March at 732,000 bpd, while Iran fell to 2,698 million bpd. With several declines expected as the sanction diverges, eight countries have so far had an end today. Iran's 208 average production was 3,553 million bpd, while Venezuela averaged 1,354 bpd, according to secondary sources from OPEC.
The tough times that Iran and Venezuela are now can continue to tickle a wedge in the oil cartel that other members will naturally respond to market demand as they are able.
By Julianne Geiger for Oilprice.com
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