OPEC meeting: another winning chance for Iran

As one of the key players in the world’s political and economic turnovers, oil market has been witnessing lots of ups and downs in recent years.

TEHRAN TIMES- As one of the key players in the world’s political and economic turnovers, oil market has been witnessing lots of ups and downs in recent years.

In late -2015, oil prices fell to more than half from highs of above $100 a barrel in 2014 as rising production from U.S. shale oil combined with other global oversupplies and OPEC output pushed the prices down drastically.

Low oil prices could impose big problems to the global economy. Markets around the world rely heavily on emerging economies - like Saudi Arabia and Russia - which are mostly rich in oil and plunging oil prices could result in shrinkage or slow economic growth in such countries.

To rebalance the market and to help the prices surge again, the Organization of the Petroleum Exporting Countries (OPEC) decided to cut the oil production for the first time in eight years.

After holding several meetings and going through hours of discussion and negotiation, the cartel joined by a group of non-OPEC nations - including Russia, Mexico, Kazakhstan and Oman - agreed to cut production by about 1.2 million barrels per day, or about 4.5 percent of its production, to 32.5 million barrels per day in November 2016.

Iran, Russia and Saudi Arabia played crucial roles in reaching the agreement. Iran was seen to be one of the most significant players. Reuters published a report at the time saying that a phone call between Russia's President Vladimir Putin and Iranian President Hassan Rouhani, just before the OPEC meeting, had an important part in helping to reach the deal on cutting oil output.

Some even believed that Iran was the sole winner of OPEC deal. “Iran is now able to sell as much oil as it wants and to any country it deems appropriate,”…”Iran was not only exempt from OPEC’s cuts but was also allowed to ramp up production to 3.797 million barrels per day,” Oilprice reported in December 2016.

Tehran Times
Publish Date: May 21, 2017