OPEC Deal Disintegrates After Iran Press Accuses Saudi Arabia Of "Reneging" On Agreement

When news of this surprising announcement by Saudi Arabia hit on Friday, oil tumbled the most in weeks. However, if Iran is right, and if the Saudi move indicates that the preliminary Algiers framework is dead, then crude has a long way more to fall:

In time with the tactical retreat on Saudis from attending the joint meeting of OPEC and non-OPEC members on Monday, Russia has also announced that it will not participate in the session in order to make any comprehensive deal literally impossible. 

Needless to say, Iran is not happy with what it sees as Saudi Arabia reneging on the terms of the origianl deal to "pressure" member states into once again accepting its demands, something that has been a key hurdle to any OPEC deal since November 2014: "apparently, under the pretext of lack of agreement among members, Saudi Arabia refuses to attend the Monday meeting, while in fact, Saudis, as OPEC's largest oil producers plan to apply pressure on certain countries in order to dictate their policies to the member states."

The Iranian complaint is simple: it believes it should be allowed to produce more:

In the past 12 years, Saudi Arabia and Iraq have enjoyed the lion's share in crude production among all OPEC members to the extent that both countries, Saudi Arabia in particular, have taken over shares of other states by exploiting turbulent conditions like Iran's oil sanctions, Libya's internal conflicts, technical issues in Venezuela's oil industry not to mention ongoing disputes in Nigeria. 

According to secondary sources, Saudi Arabia's production share in OPEC has risen from 29.1% in 2004 to 31.5% in 2016 and the figure for Iraq increased from 6.5 to 13.2 per cent in the sameperiod. 

Moreover, share of the UAE rose from 7.7 to 8.8 and for Kuwait from 7.6 to 7.8 while the figure for Iran dropped from 13% in 2004 to 8.6% in the present year even though the country's production soared following implementation of the Joint Comprehensive Plan of Action (JCPOA). 

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