Sputnik�-� Over two weeks ago Iran filed a formal complaint to OPEC President and UAE Energy Minister Suhail Mohamed Al Mazrouei, accusing the OPEC+ Joint Ministerial Monitoring Committee (JMMC) of trying to redistribute production compliance quotas among select members while getting other non-OPEC member countries to assume additional compliance.




Iran, which only recently received the right to�freely trade its oil, is extremely dissatisfied with�the fact that OPEC and a number of�non-member countries, including Russia, which agreed at�the end of�2016 to�reduce oil production by�1.8 million barrels per day, are now redistributing quotas.

Just several months ago, at�the end of�June, OPEC and non-OPEC countries agreed to�boost crude oil production starting July returning to�previously agreed output cuts, after�months of�underproduction, but�didn�t specify how exactly the production increase would be split between�OPEC and non-OPEC nations.

The most basic discontent and concern of�Iran in�this situation is precisely the work of�the OPEC+ monitoring committee to�control the production of�each country in�accordance with�its quota, Seyyed Saeed Mirtorabi Hosseini, an Iranian oil and gas analyst, from�Kharazmi University told Sputnik.

�OPEC production quotas are a formal agreement between�states that must be formally observed by�all members of�the organization, depending on�the capability of�each individual exporting country. However, in�practice this is not always the case. For example, Saudi Arabia, the world's largest oil exporter, as�well as�its allies from�the Cooperation Council of�the Arab States of�the Persian Gulf (GCC), cast a shadow over�the agreements reached within�OPEC. And other members are forced to�inevitably coordinate their actions with�the decisions of�the OPEC monopolist � the Kingdom of�Saudi Arabia,� Mirtorabi explained.
�Iran can act within�the framework of�formal agreements and express diplomatic protest against�some countries exceeding their production level approved in�2016, as�well as�the redistribution of�quotas and the work of�the OPEC monitoring committee, but�in practice this will not change anything. Past experience has shown, unfortunately, that in�OPEC its main monopolist � Saudi Arabia � has the final say.�


The expert noted that in�such a difficult situation that's developed within�OPEC, Russia, which has good relations with�Iran, can quite possibly act as�a moderator:

�If we return to�the issue of�freezing oil output at�the 2016 level, which was raised by�the OPEC countries, the Russian Federation supported the position of�Iran: the Islamic Republic oil production fell due to�international sanctions, and now it wants to�increase it, at�least to�the pre-sanctions level and 'not to�freeze it.' Moscow insisted that Iran should be exempt from�the list of�those countries that agreed to�freeze their output. And given the fact that Iran and Russia have a strategic partnership on�a number of�important issues, we expect that Moscow will support us in�the framework of�the OPEC +, despite�separate agreements with�Saudi Arabia.�

Tehran's oil quota concerns are fully justified, since�the production of "black gold" by�the Islamic Republic of�Iran, as�well as, its trade, can end up�entangled in�traps set by�President Trump, which he intends to�place on�all fronts of�the oil industry starting November 4 this year. The US president intends to�impose an embargo on�Iranian oil by�restoring sanctions against�Iran and this way wants to�cut off�the main source of�income of�the Iranian economy.

Is it worth it for�Iran to�start a �battle� with�OPEC in�these difficult circumstances? According to�Manouchehr Takin, an independent oil and energy consultant and former senior officer at�OPEC, in�spite of�everything, Iran will be able to�maintain its oil exports, albeit in�smaller volume, and the disagreements with�OPEC will be solved without�any scandals:
�The news published by�the media about�alleged tension with�Iran inside�OPEC only adds fuel to�the fire. But in�fact, there is only a disagreement on�the stance that countries have on�oil prices and the volume of�production. But anyway, the ministers of�the OPEC member countries will unambiguously reach a compromise and a consensus. And Iran will not lose its share. Now the US is trying to�paralyze the supply of�Iranian oil, in�particular, they are imposing an embargo in�November. But the export of�Iranian oil is still underway, although the United States is trying to�exert pressure on�some countries, for�example, intimidating India.


Yes, there will be problems, the production of�Iranian oil may fall, but�it can find detours, there will not be a complete paralysis of�oil exports.�

Partially agreeing with�the Iranian expert on�this issue is Raiffeisen Bank's oil and gas sector analyst Andrey Polishchuk. However, Mr Polishchuk explained that Iran has no reason to�hope that the OPEC+ June decision on�quotas will be reviewed:
�The agreement reached in�June will expire this year. No one will revise it. It is important to�remember that there's a right of�veto in�OPEC, although this veto can be considered a kind of�conditional procedure, because within�the organization, if a country fails to�fulfill its obligations, there is no punishment. That means that any agreements reached in�OPEC can be considered a gentleman's agreement. Therefore, each country has the right of�veto, including Iran. But since�Iran did not use it during�the OPEC+ meeting, this means that it agreed with�the decision.


The Raiffeisen Bank analyst also noted that the production of�Iranian oil is likely to�decline:

�It is possible to�assume that since�November it may decrease, given past�experience of�oil sanctions against�Iran, but�not in�large volumes, as�Tehran has already adjusted, established production and knows its partners � who are ready to�buy its oil bypassing sanctions and with�a good discount,� Mr Polishchuk concluded.