EMEA News
Iran Will "Oppose" Any Bid to Stabilize Oil Market Due to Saudi Conflict
Any hope of persuading the Organization of the Petroleum Exporting Countries (OPEC) to regulate oil output and stabilize prices is more remote than ever now that Saudi Arabia has cut ties with Iran over the kingdom's execution of a Shi'ite Muslim cleric, media reports.
Saudi Arabia cut ties with Iran on Sunday in response to an attack on its embassy in Tehran by crowds protesting the cleric's execution.
Saudi allies Bahrain and Sudan have also severed relations with Iran as part of an escalating row that has also seen the UAE downgrad its political presence.
An unnamed oil industry official in a Persian Gulf Arab country told The Wall Street Journal this week that despite OPEC in December considering the possibility of an emergency meeting to discuss global overcapacity and potential countermeasures, "Whatever plan we come up with, if there is one, Iran will oppose it, especially after what just happened.
"For them, it is politics."
An emergency meeting was considered crucially important, given Iran's vow to export up to one million barrels per day of extra crude when the U.S. and European Union sanctions against the country are lifted early this year.
Amidst the outcry over Saudi Arabia executing the cleric on the grounds of trying to quash terrorist activity, the envoy of Shi'ite Iran has been asked to leave the kingdom within 48 hours; meanwhile, Iran's top leader, Ayatollah Ali Khamenei, has predicted "divine vengeance" for the execution.
The developments appeared to have little net impact on Monday's oil markets, however, which ended the day down despite a 4 percent spike early in the day.
Iran, which was reported to have been significantly ramping up its oil and petroleum products export activity as early as last September, expects OPEC to "pave the ground" for an increase in oil production, Iranian oil minister Bijan Namdar Zanganeh has said.
