Iran’s minister of petroleum Bijan Zangeneh has said Saudi Arabia bowed to US pressure, and is violating the Organization of the Petroleum Exporting Countries (OPEC) pact, reached in June, according to which Saudi Arabia is not suppose to raise its' production.
“In my opinion, this violation has taken place under American pressure on the Saudi rulers,” Iran’s minister of petroleum Bijan Zangeneh said on Tuesday in an interview with Shana news agency.
Zangeneh reiterated Iran’s position that neither Saudi Arabia nor Russia can replace Iranian oil. “As I have said many times, there is no replacement for Iranian oil in the market,” he said.
“Saudi and Russian oil production is now close to its' highest historical level, and the two countries have no additional capacity to produce more and replace Iran's oil,” he added.
The minister said Saudi Arabia had in fact used its inventories to release about 500,000 barrels per day (bpd) of more oil to the market between May and September.
Other OPEC members, meanwhile, had added only 105,000 barrels per day of extra oil in total during the period, which means they are not capable of producing more than current levels, he said.
As regards non-OPEC producers, Zangeneh said, Russia’s oil production in September increased to its' highest level by 388,000 barrels per day from May. “Therefore, Russia cannot increase production further in the short term, without investing in its' upstream industries.”
Iran’s minister of petroleum wrote to his Saudi counterpart Khalid al-Falih in July to remind him that OPEC’s supply pact did not give member countries the right to raise oil production above their targets.
Saudi Arabia said it has to use its' oil reserves if it wants to cover oil loss from US sanctions on Iran.
Earlier this month, Saudi Crown Prince Muhammad bin Salman said the kingdom was fulfilling promises to the United States to make up a shortfall in world oil supplies resulting from the loss of Iranian production under US sanctions.
“Bin Salman's remarks can only satisfy (US President Donald) Trump. No one else will believe him,” the Iranian minister said then.
Back in May, the US withdrew from a 2015 multilateral nuclear agreement with Iran and said it would re-introduce anti-Iran sanctions that had been lifted under the accord.
Washington reinstated a series of unilateral sanctions against Iran in early August and would re-impose a second batch in November which would primarily be meant to undermine Tehran’s oil exports.
US Treasury Secretary Steven Mnuchin said on Sunday that countries could win US consent for some imports to continue if they reduce their purchases of Iranian oil.