Iran warns OPEC of losing effectiveness

TEHRAN, Jul. 17 (MNA) – In a letter to OPEC President Mohamed Al Mazrouei, Iranian Oil Minister Bijan Namader Zanganeh highlighted that if member countries do not adhere to their commitments regarding oil output, the effectiveness of the organization will be gradually eroded.

In the letter, Zanganeh reminded Mazrouei, who is the Minister of Energy & Industry of the United Arab Emirates, of the decision made at the 174th OPEC Conference (22 June 2018), that Member Countries committed to bring the conformity level of their commitment to production adjustment to 100%, as of July 2018.

The following is the full copy of the correspondence as reported by SHANA:

HE Suhail Mohamed Al Mazrouei

Minister of Energy & Industry and the President of the Conference

United Arab Emirates

Excellency,

With reference to Your Excellency's letter No. M.O.E.1/96/960 dated 5 July 2018, as Your Excellency is well aware of the decision made at the 174th OPEC Conference (22 June 2018), Member Countries committed to bring the conformity level of their commitment to production adjustment to 100%, as of July 2018. However, the aforesaid decision neither warrants Member Countries the right to exceed their production level above the allocated quota decided at 171st Meeting of the OPEC Conference, nor the right to redistribute the production cut quota among Member Countries. This implies, the decisions and production ceiling agreed upon at the 171st Meeting of the OPEC Conference are still valid, and the production level of Member Countries must be in full compliance with these agreed commitments.

Whereas, according to the OPEC Secretariat latest Monthly Report, some Member Countries' production level in June 2018 was far above the agreed production level allocated to them. This is a violation of their commitments undertaken at the 171st Meeting of OPEC Conference. We are concerned that this violation may continue in the remaining implementation months ahead and in contradiction with the agreement adopted at the 171st and 174th Meetings of the OPEC Conference and turn into a routine practice.

Therefore, taking into consideration the above observations, it is essential for the JMMC to monitor the production of Member Countries from July 2018, which is the first month of implementation of the Resolution 174.513, and report country by country the extent of their conformity to the OPEC Conference.

In my view, in case the OPEC Member Countries do not fully adhere to their commitments, the effectiveness of this Organization as the only developing countries' intergovernmental organization with almost sixty years of history, will be gradually eroded, and the responsibility of this would lay with those Member Countries violating their commitments.

It would be highly appreciated if Your Excellency could instruct the OPEC Secretariat to circulate the present letter among Their Excellencies, heads of the delegation of the OPEC Member Countries.

Please accept, Excellency, the assurances of my highest consideration and respect.

Bijan Zanganeh

MAH/SHANA

News Code 135782

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