Iran Protests Russia-Saudi 'Private' Oil Agreement

Iran reacted to a Reuters report about a 'private' agreement between Russia and Saudi Arabia to increase daily oil production by half a million barrels, accusing them of violating the 'cooperation statement' of OPEC and allied countries. On Wednesday, October 3, Reuters reported, citing informed sources, that Saudi Arabia and Russia had agreed during the OPEC monitoring committee meeting on October 1 in Algeria to increase oil production again. This comes after the U.S. request for OPEC to increase oil production was publicly rejected at the same meeting. The report indicates that Saudi Arabia and Russia not only decided among themselves to increase daily production by half a million barrels but also informed the U.S. of this decision. Russian President Vladimir Putin stated on Wednesday that U.S. President Donald Trump is right to say that oil prices are high, attributing the price increase to 'wrong' U.S. policies. He mentioned that a price range of $65 to $75 for oil is good. Russian government statistics show that for the first time in several years, due to the average price of its exported oil exceeding $70 in the first nine months of this year, Russia will not face a budget deficit but will have a surplus. Currently, oil prices have surged above $85, leading to criticism from the U.S. and other oil-importing countries. Concurrently, Hossein Kazempour Ardebili, Iran's representative in OPEC, told the Shana news agency, affiliated with the Ministry of Oil, that Saudi Arabia and Russia have increased production by 346 and 250 thousand barrels per day, respectively, compared to their commitments in the OPEC cooperation statement, which constitutes a violation by these two countries. In June of this year, OPEC and allied countries decided to increase oil production by one million barrels. Iran claims that according to the 'cooperation statement,' only countries that have reduced production excessively are allowed to increase production. However, the position of the OPEC monitoring committee and allied countries does not support Iran's viewpoint, and there has been no protest against the production increases by Saudi Arabia and Russia in recent months. For example, Venezuela has seen a decline of nearly one million barrels in production over the past two years and cannot increase production. Mr. Kazempour Ardebili also denied any reduction in Iran's oil production. According to OPEC statistics, Iran's oil production has decreased by about 235 thousand barrels from May (Ordibehesht) when the U.S. withdrew from the JCPOA until August. Reuters reports that Iran's oil production fell by another 100 thousand barrels per day in September. However, Iran denies the decline in its production in the statistics it has submitted to OPEC (the primary sources table in OPEC's monthly report). Reuters notes that Khalid Al-Falih, Saudi Arabia's oil minister, and Alexander Novak, his Russian counterpart, have agreed to increase daily oil production by a total of half a million barrels from September until the end of this year. A source told the news agency that Mr. Al-Falih informed Rick Perry, his American counterpart, that Saudi Arabia is ready to increase production if customers request it. Russia, which had increased its production by about 250 thousand barrels from May to August, has again increased production by 150 thousand barrels in September. The country plans to raise its production to between 11.4 and 11.6 million barrels per day by the end of the year and aims to increase this figure to 11.8 million barrels by late next year. Putin stated on Wednesday that the country could add 200 to 300 thousand barrels per day to its production. Mr. Al-Falih also stated that Saudi Arabia could raise its daily production to 10.7 million barrels, which is 700 thousand barrels more than its production in May. Several sources told Reuters that Mr. Perry met with his Saudi counterpart three times last month and once with his Russian counterpart and was aware of their decision.