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Iran Faces Mounting Pressure to Accept OPEC+ Meeting in July

Iran Faces Mounting Pressure to Accept OPEC+ Meeting in July

(Bloomberg) -- Russia’s energy minister is set to arrive in Tehran on Monday, hoping to nail down a new date for the next meeting of OPEC and its oil-producing partners.

Iran is the last holdout against a proposed rescheduling of the summer meeting to early July, a change sought by Russian Energy Minister Alexander Novak. The month-long impasse has once again exposed political fissures at the heart of the 24-nation coalition.

The request to shift the meeting originated from Russia, a producer outside the Organization of Petroleum Exporting Countries that has exerted a strong influence over the coalition since its formation almost three years ago. The alliance known as OPEC+ plans to discuss whether to keep restraining their production for the rest of the year as crude prices falter.

Novak is seeking to win over his Iranian counterpart Bijan Namdar Zanganeh to a proposed meeting on July 3-4, instead of June 25-26 as planned. Talks on changing the dates are at a final stage, Novak said on June 14 in an interview with Nikkei. Iran has already signaled that it’s flexible on rescheduling the OPEC+ part of the meeting but not the date for the gathering of OPEC itself.

Diplomatic Crisis

Differences over the timing began as a mere scheduling clash, but escalated rapidly into a diplomatic crisis that pit long-standing regional rivals Saudi Arabia and Iran against each other. The dispute played out amid a broader geopolitical confrontation as the Saudis -- and the U.S. -- accused Iran of complicity in attacks on two oil tankers near the Strait of Hormuz on June 13. Iran, which is under U.S. sanctions, denied culpability.

While Brent crude jumped as much as much as 4.5% on the day of the tanker attacks, the benchmark has dropped by almost $14 a barrel from its intraday peak this year on April 25. Saudi Arabia is working to balance global oil markets in 2019, the country’s energy minister said on Saturday when asked if there’s an impending surplus.

“I think it’s essentially all countries have agreed except one, so we hope they will come along and that we will have a date confirmed in the next couple of days,” Khalid Al-Falih told reporters on Monday in Tokyo.

OPEC+ will probably meet “the first week of July, and that will secure the re-balancing the market as we strive for it,” Al-Falih told reporters on Sunday on the sidelines of a G-20 ministerial meeting in Karuizawa, Japan.

Algeria, like Iran, initially opposed pushing the meeting to July, saying the proposed new date would conflict with a planned election in the North African country. The Algerians later canceled their July 4 vote, leaving Iran as the sole holdout against the rescheduled meeting.

--With assistance from Tsuyoshi Inajima.

To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net;Golnar Motevalli in Tehran at gmotevalli@bloomberg.net;Arsalan Shahla in Dubai at ashahla@bloomberg.net

To contact the editors responsible for this story: Nayla Razzouk at nrazzouk2@bloomberg.net, Bruce Stanley, Amanda Jordan

©2019 Bloomberg L.P.