OPEC Production Cut, Another Joke

Barely 24 hours after OPEC members reached consensus, Iranian Oil Minister Bijan Zanganeh has debunked the agreement saying the figures used by OPEC are too low compared to the current production in Iran.

According to the Oil Minister “This we cannot accept and we will ask for alternatives.”

Iran, OPEC’s third largest producer, with daily production of 3.6 million barrels as of August has disagreed severally on production cut since its sanction was lifted by the United Nation in January.

One of the world’s most astute analysts, David Petraeus has called the whole pledge of the OPEC members “nonsense”. According to him, “Oil prices never should have gone up. The Saudis will continue to pump. So will the Iraqis and the Libyans if they can.”

The former CIA chief and head of the Pentagon’s Central Command lauded analysts’ opinion of the OPEC’s agreement, that the organization is too divided to go through with such agreement — especially with Iran determined to reach pre-sanction level. While Nigerian oil minister, Emmanuel Ibe Kachikwu, during a Bloomberg interview in Algeria said the country is just getting back to normal production level after a series of attacks by the militants. Making it unlikely that both Nigeria and Iran will implement the OPEC agreement when they meet again in November.

Speaking to the media at the International Energy Forum in Algeria before the agreement, Zanganeh said Iran was in Algeria to meet with OPEC members and exchange views and not to reach agreement.

“We are here for the IEF and to have a consultative informal meeting in OPEC to exchange views, not more. It’s not our agenda to reach agreement in these two days,” Zanganeh said.

This was before OPEC agreed that its members would cap production by 240,000 – 740,000 barrels per day — depending on current capacity.

But a foreign exchange research analyst at Investors King Ltd. , Samed Olukoya said “If Iran admitted its agenda is not to reach an agreement with other OPEC members prior to the commencement of the meeting, and immediately announced its disagreement of the said consensus. I don’t see how this is going to work,”  he concluded.

Crude oil prices rose 6 percent after the news was made public.