OPEC, Russia Slam Trump's Intervention in Oil Producers’ Policies

OPEC, Russia Slam Trump's Intervention in Oil Producers’ Policies

Iran reportedly demanded exemption from the cuts amid Saudi-backed U.S. sanctions, but Saudi Arabia was refusing to agree to the exemption. OPEC has been under increasing pressure from forces re-drawing the global oil map, leaving it ever more dependent on Russia's support while also subject to vehement opposition from Trump.

Heading in to Friday's meeting in Vienna, Nigerian Petroleum Minister Ibe Kachikwu told reporters he was "hopeful" the nations would be able to reach an agreement.

Analysts say that without a substantial cut being announced at today's meeting, that downward pressure will continue.

Amid worldwide pressure over the October 2 killing of Jamal Khashoggi in the Saudi consulate in Istanbul, it seemed that MBS needed the support of the White House too much.

Before Thursday's meeting, Al-Falih said that "if everybody is not willing to join and contribute equally, we will wait until they are" and he was prepared for the consequences of no deal.

OPEC members Iran, Venezuela and Libya have been granted exemptions from the cuts.

By agreeing on a level of cuts which was even deeper than expected, once again OPEC succeeded to surprise the market, a decision that definitely is not going to please the third musketeer which is probably already preparing his next tweet cascade.

Last week, the Organization of the Petroleum Exporting Countries agreed to reduce its overall member production by 800,000 barrels a day from October's levels for six months, beginning in the new year.

Russian Energy Minister Alexander Novak called the negotiations with the OPEC nations "fairly challenging" but said the decision "should help the market reach a balanced state". Iran would get its exemption, but it wouldn't be mentioned in OPEC's written communique. Nigeria, which has been exempt since the previous round of cuts in January, 2017, agreed to participate. "That isn't nothing, but it's more of a Champagne toast moment for political leaders than a blow-out celebration for statisticians and economists", he said.


Meanwhile, Iran is still selling crude despite sanctions.

“Now we have a situation where supply will come off the market, ” Badiali said.

The Saudi government threatened to retaliate against any punishment such as economic sanctions, outside political pressure or even "repeated false accusations" about the Khashoggi killing, although it walked back the threat subsequently following signs that the Trump administration had no appetite for imposing sanctions on the long-term US ally. It remains uncertain whether prices will rise as expected.

Washington added fuel to the fire when USA special representative for Iran Brian Hook met Falih in Vienna this week, in an unprecedented development ahead of an OPEC meeting.

Saudi Arabia first denied the Hook-Falih discussion took place but later confirmed it.

Oil prices rallied by almost three percent to $62.92 after the move.

The price of crude has fallen nearly a third since October as Saudi Arabia, Russia and the United Arab Emirates raised output to offset lower exports from Iran. The United States, one of the world's biggest producers, is not part of the deal.

OPEC is going through a transitional phase, as non-OPEC producers, with Russian Federation in the forefront, are now exerting more influence on the oil market.

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