OPEC Oil ministers meet in Vienna, Iran rejects oil output cap

OPEC oil producing group is meeting in Vienna on Thursday but mounting tensions between the 13 members of the producer group – and the differing economic needs of each country – are expected to stymy any deal on the oil output which could support oil prices.

OPEC ministers arriving at the organization’s headquarters in the Austrian capital on Thursday appeared to be at odds over what the bloc’s next move should be.

While some such as Kuwait and Qatar appeared to lean towards the Saudi Arabian way of thinking – agreeing on the need for an output ceiling – others such as Venezuela and Algeria seemed to agree with Iran, which said an output ceiling must be accompanied by a country-specific quota system.

Other oil ministers, such as Nigeria’s, called for open-minded discussion and unity – something that has been in short supply at previous meetings.

Abdalla Salem el-Badri, Secretary General of OPEC said as the meeting got underway on Thursday that for the first time in many months there was a “very positive” atmosphere among the cartel’s members, however.

He said he was pleased with the way the oil market was recovering – now close to $50 per barrel.

Iran refusal and output cap

OPEC is not expected to cut or freeze oil production levels at the meeting – ideas that failed to find a unified support at its last meeting in Doha in April.

Hopes of a deal were dashed after Iran – an OPEC member that is trying to revive its oil industry after years of economic sanctions – refused outright to consider a freeze.

The Iranian minister, Bijan Zanganeh, said on the eve of Thursday’s meeting that a production cap would have “no benefit” for Iran – or for the other members of the cartel, which pumps around a third of the world’s oil.

“One of our main ideas is to have country quotas, but I don’t think we can reach an agreement on this subject at this meeting,” the minister said as he arrived in the Austrian capital.

Iran exported more than 2m barrels of oil every day in May and Zanganeh predicted that would soon double as the country is currently producing some 3.8m barrels a day.

He said the meeting would focus on choosing a new Opec secretary general to replace Abdalla El-Badri of Libya.

Candidates to succeed him include Ali Rodriguez Araque of Venezuela, Nigeria’s Mohammed Barkindo and Mahendra Siregar of Indonesia.

“The main item on our agenda at this meeting is choosing the new secretary general for Opec,” Zanganeh said.

OPEC Oil ministers meet in Vienna, Iran rejects oil output cap