LONDON (Reuters) – Saudi Arabia and Russia won’t add significantly more oil to the market because of a lack of capacity, a top Iranian official said on Monday, predicting prices will probably rise further.
On Sunday, ministers and officials from the Organization of the Petroleum Exporting Countries plus Russia and other allies ruled out an immediate oil-output boost, in effect rebuffing U.S. President Donald Trump’s calls for action.
The move helped push crude prices <LOc1> to a four-year high near $81 a barrel on Monday. Also underpinning the market is the prospect of lower exports from Iran, OPEC’s third-largest producer, due to U.S. sanctions.
Iran’s OPEC governor, Hossein Kazempour Ardebili, said in comments to Reuters that Saudi Arabia and Russia were unable and unwilling to add more production at short notice.
“They are doing little and late, to get prices higher,” he said. “They got prices higher and they are going to get them higher still.”
“There is no spare capacity. They cannot deliver the extra capacity that they claim.”
Saudi Arabia, OPEC’s biggest producer, says it can add an extra 1.5 million barrels per day – about 1.5 percent of world demand – to the market. But Energy Minister Khalid al-Falih said on Sunday such a move was not needed at the moment.
Sunday’s meeting appeared to leave unresolved a disagreement which flared up in June between Saudi Arabia and Iran over whether OPEC members are allowed to pump more oil to make up shortfalls elsewhere.
Under pressure from Trump, OPEC and allies agreed in June to boost production, after months of undersupply by OPEC countries including Venezuela and Angola and the prospect of the Iran sanctions.
Saudi Arabia said the deal allowed countries able to produce more, such as itself, to go ahead and do so, to make up for shortfalls. Iran disagreed and Kazempour maintained that position on Monday.
“Extra production beyond OPEC quotas requires permission of the conference,” he said. “Assignment of OPEC share to non-OPEC requires conference approval.”
The next meeting of the conference – the full group of OPEC and non-OPEC ministers, is not until December. The OPEC governor is typically the second most senior post in a country’s OPEC delegation after the oil minister.
Iran’s minister, Bijan Zanganeh, was quoted on Monday as saying the meeting did not give a positive response to Trump.