(Bloomberg) -- OPEC nation Iran said it expects the group to stick with its pact to restrain oil supply as world markets don’t need more crude.
The Organization of Petroleum Exporting Countries and its partners will meet next week and debate whether to restore output halted last year. Saudi Arabia and Russia have said it’s time to reverse the cuts and appear to have begun reviving supplies, but face opposition from Iran, Iraq and Venezuela.
“There is no need for a change in the level of production,” said Iran’s OPEC governor, Hossein Kazempour Ardebili, who serves as one of the country’s representatives to the group. “Any increase should be limited to the production allocation in the agreement, which is valid to the end of 2018.”
The International Energy Agency -- which advises consuming nations -- said earlier Wednesday that output from Iran and Venezuela could drop by 1.5 million barrels a day, or almost 30 percent, by the end of next year because of U.S. sanctions and economic upheaval.
Kazempour rejected the IEA’s scenario, saying “there is no reduction in Iranian production,” which “for the remaining part of the year shall continue as is.” Venezuela will stem declines in its output, he said.
On Tuesday, the U.S. government’s Energy Information Administration raised estimates for global oil demand in 2018.
The EIA and the IEA are trying to “instigate the increase in production of OPEC,” Kazempour said. U.S. President Donald Trump repeated criticism of OPEC in another tweet on Wednesday, blaming the group for keeping prices too high.
Oil’s recent rally to a three-year peak above $80 a barrel in London has prompted warnings that prices could hurt economic growth. Yet Kazempour insisted that OPEC will resist pressure to raise production.
“The Trump administration is trying to intervene in the affairs of a sovereign organization,” he said. Such attempts have failed in the past and “they will also fail” this time.
The group’s decisions must be unanimous, and Iraq and Venezuela have also shown opposition to the proposal to boost supply. Other countries in the group will support Iran and Venezuela -- two of the five countries that founded OPEC -- in the face of U.S. sanctions, Kazempour said.
There are also nations in the broader 24-strong alliance that oppose increasing output as global markets are already “well supplied,” he added.
Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman plan to discuss the OPEC accord and oil markets at talks in Moscow on Thursday, a spokesman said. Russia has already boosted supply above the level agreed on in the deal with OPEC, according to a person familiar with the matter.
Many oil analysts say that, even without a full OPEC agreement, Saudi Arabia and Russia will likely just go ahead and raise production.
“Any country, individually or bilaterally, may do anything they want, but when it comes to OPEC it’s 14 sovereign states who have to reach a collective decision,” Kazempour said. “We have an agreement which is valid to the end of the year. OPEC will abide with the production agreement.”
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