OPEC has little idea about how to protect Iran against stern US sanctions
Vienna, Sept 18: The Organization of the Petroleum Exporting Countries (OPEC) must keep together for the sake of the global economy as the body's founding member Iran faces renewed sanction from the United States, its secretary-general Mohammed Sanusi Barkindo said on Tuesday, September 18, the Associated Press reported.
However, the report also added that Barkindo did not specify how the market, which is already tight, could make up for the loss of supply from a key producer like Iran.
Barkindo, 59, also said the pact made between the OPEC members and non-members that saw a slash in production and brought the prices back from lows of $30 per barrel in January 2016 was now "a permanent feature".
The OPEC nations will meet in Algeria this Sunday, September 23, and talks on arrangement will feature in the discussion.
The cartel is nevertheless likely to face anger from Iran as it has come under more and more pressure once US President Donald Trump pulled his country out of the 2015 nuclear deal reached between Tehran and leading world powers in early May.
US asks Russia, Saudi to make up difference
American oil sanctions on Iran will resume in November and already, US allies in Asia are busy reducing their purchase of crude from Tehran. The US has also asked Russia and Saudi Arabia to make up for the difference, something which has allowed those to countries to take up "hostage taking policies in the market", according to Iran's OPEC governor Hossein Kazempour Ardebili, the AP report added.
However, the OPEC still doesn't have any idea on how it would protect Iran while comforting it at the same time.
According to analysts, oil prices will shoot up further as production will receive a blow because of the loss of supply from Iran, a key member of the bloc.