Iran Oil Minister Slams Producers For Not Cutting Output

Iran’s oil minister accused some countries on Sunday of making up excuses to justify their refusal to stabilise prices by cutting output, a possible reference to Saudi Arabia as a Saudi official insisted the issue should be left to market forces.

“Certain countries had raised their production after the exit of several countries from the cycle of oil production,” Iran’s Bijan Zanganeh said, referring to international sanctions that have forced his country to cut its exports sharply.

“Now it is difficult for them to reduce their production for market stability and they fabricate different pretexts for their action,” Zanganeh said, quoted by his ministry’s news agency Shana.

Zanganeh did not name the countries but he may have been referring to Saudi Arabia, the world’s top oil exporter and dominant force within the Organization of the Petroleum Exporting Countries.

Saudi Finance Minister Ibrahim Alassaf said on Sunday that while his country had been praised in the past for preserving oil market stability, “Everybody agrees that the issue is subject to supply and demand and has to be left to supply and demand.”

Brent crude oil last week hit four-year lows below $80 a barrel on concerns about oversupply. Oil has fallen from a June high above $115.

Few analysts think OPEC will do much to prop up prices when it meets on Nov. 27.

Zanganeh visited Qatar and Kuwait last week, ahead of the meeting, in a bid to win support for action to stabilise oil markets, though there was no sign that those countries would cooperate with Iran. He plans to visit the United Arab Emirates on Tuesday.

On the Qatari and Kuwaiti positions, “We cannot tell one hundred percent how close our views are…” Zanganeh said.

Iran needs a much higher oil price to balance its state budget than Saudi Arabia, so oil’s tumble in recent months has put it under severe financial pressure. Zanganeh said on Saturday that Tehran would dip into its sovereign wealth fund to cope with the economic impact.

He also said on Sunday that low oil prices were disrupting the stability and growth of shale oil production, and that the OPEC meeting was expected to discuss the effects of shale oil on the market.