Iran's OPEC Representative: Instead of Using Strategic Oil Reserves, the U.S. Should Lift Sanctions

The Iranian representative at the Organization of the Petroleum Exporting Countries (OPEC) stated that the U.S. should lift its oil sanctions on Iran instead of using its strategic oil reserves to keep oil prices low. On Tuesday, July 16, Hossein Kazempour Ardebili told Bloomberg, "Mr. President (Donald Trump), my advice to you is to refrain from tapping into your strategic reserves to reduce oil prices and lift the sanctions on Iran." Bloomberg reported that sources indicated the U.S. government, under pressure ahead of the congressional elections in November, intends to use its strategic and emergency reserves to lower oil prices. Simultaneously, the U.S. plans to implement Iranian oil sanctions in November (November 4). In this context, U.S. Treasury Secretary Steven Mnuchin stated on Thursday, July 11, during a report to the House Financial Services Committee that if China, Russia, and Europe continue to buy oil from Iran, they will be subject to Washington's sanctions. The United States officially withdrew from the nuclear agreement with Iran on May 8. Following that, the U.S. announced the imposition of a new round of severe sanctions against Iran in two phases and a reduction in Iran's oil exports. The Iranian representative at OPEC addressed Donald Trump, saying, "As I previously predicted, there is no excess global oil production capacity to compensate for Iran's production decline, and apparently, you are using your strategic reserves to increase oil supply and lower prices. This will have many consequences." Reports indicate that the U.S. is also negotiating with some OPEC members, including Saudi Arabia, to compensate for the reduction in Iranian oil production by increasing their own output. According to the International Energy Agency, Iran currently exports 2.5 million barrels of oil and gas condensate daily, which could be halved after sanctions are imposed. Russia, the United Arab Emirates, and Saudi Arabia have expressed a willingness to increase production. In this regard, Hossein Kazempour Ardebili stated, "Russia, the UAE, and Saudi Arabia pretend to have the capacity to produce 2.5 million barrels of oil daily. Mr. President (of the U.S.), this is a miscalculation: you have fallen into their trap, and oil prices will rise." He had previously stated that Mr. Trump's critical tweets about OPEC had raised oil prices by $10. Trump has repeatedly urged OPEC to increase production to lower oil prices. In an interview with Bloomberg, the Iranian representative at OPEC told Donald Trump, "But if we stop our exports for a month, you will realize what will happen to the world economy, and you will reconsider (the sanctions). However, we are a civilized nation and a responsible government." Global oil prices, which had fallen to nearly $80 last week, have again declined to around $75 due to increased production from Saudi Arabia and the potential use of U.S. strategic reserves. Brent crude oil prices are currently just above $75. Last month, Saudi Arabia increased its production by more than 400,000 barrels per day and has had an even larger production increase this month. Bloomberg reported that the U.S. currently plans to test the market by releasing about 5 million barrels from its strategic reserves, and if prices drop, this figure could rise to 30 million barrels.