President Donald Trump’s tweeting habits are lifting oil prices, and the U.S. leader should stop posting on social media to alleviate the spike in prices, according to one Iranian official.
“The Trump administration is pushing politics into the OPEC (Organization of Petroleum Exporting Countries), and is aiming at spreading the members and securing their own interests by getting lower prices and so forth,” Hossein Kazempour, Iran’s OPEC representative, told CNBC’s Steve Sedgwick at the Joint Ministerial Monitoring Committee (JMMC) in Algiers on Sunday.
OPEC, along with a group of Russia-led producers, put a cap on output in January 2017 in response to a supply glut and a sustained rout in oil prices that bankrupted U.S. energy firms and escalated unrest in exporting countries.
Trump has criticized the producer cartel several times over what he claims is the deliberate inflation of oil prices. The U.S. president has called it a “monopoly” and urged it to “get prices down now.” OPEC disputes Trump’s claims, arguing that its primary objective is to balance and stabilize the market.
“I think what they are doing actually is (leading to) higher prices because the fundamentals even do not warrant this level of prices,” Kazempour said.
“If they kept quiet, the prices would be cheaper, I am confident about that,” he added. “I am telling him (Trump), keep quiet, do not do any tweets, and then you will be better off in the prices.”
OPEC has come under pressure to raise output amid a steep downturn in supply among some of its biggest exporters.
One is Venezuela, which has been faced with a sharp fall in production amid a deepening economic crisis and the threat of U.S. sanctions.
Another is Iran, which has been the target of new U.S. sanctions targeting its oil industry since Trump decided to pull America out of the 2015 Iran nuclear deal.
One set of sanctions has already been imposed on the Middle Eastern nation and another is due to come into effect in November. The U.S. State Department has been warning companies buying Iranian crude to put an end to purchases by early November.
Europe, which has attempted to salvage the 2015 deal following the U.S. pull-out, pleaded with America to bring about waivers to exempt certain industries, such as finance and energy. But U.S. Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin rejected that plea, saying the sanctions are aimed at maximizing economic pressure on Iran.
Kazempour said that he viewed Washington’s increased political pressure on Iran and OPEC “something which cannot be accepted.”
“I think first of all they are not attempting to break Iran they are trying to change Iranian behavior on issues which are not related to oil,” Kazempour said.
“Leveraging oil against the political will of the OPEC members here, as well as individuals, is something which cannot be accepted. Not by Iran only, but also by others.”
OPEC a ‘non-political organization’
Oil prices have been rallying as of late on the back of faltering supply in the market, however investors became more cautious Friday after a report said OPEC and non-OPEC producers were considering a further hike in crude production of 500,00 barrels a day.
In its last meeting, the the JMMC struck a deal to hike supply, without specifying how much it would look to increase production by. On Sunday, OPEC said the oil industry would need to invest $11 trillion over the next two decades to satisfy international crude demand.
“We are a non-political organization,” Suhail Al Mazrouei, the United Arab Emirates’ energy minister and president of OPEC, told CNBC Sunday. “The job of this organization and all of the producers participating with us is to achieve a market balance.”
Mazrouei also said that OPEC has spare capacity amid supply cuts in Iran and Venezuela, but he stressed that the oil would only be produced “if there is a demand for it.”
Also announced in Algiers was the date of the next meeting of the Joint Ministerial Monitoring Committee (JMMC) of OPEC and non-OPEC members. It will be held on November 10-11 in Abu Dhabi, ahead the already planned summit in December.
When asked why this additional meeting was needed, Mazrouei echoed the messages of his Gulf counterparts, who stressed the need to monitor output and compliance levels to ensure price stability.
“We are in a fluid market condition that would require month-on-month meetings,” the minister said.
He added: “We have a responsibility toward the market stability. If we are not meeting at those critical times, then we are giving the signals that we are not serious. We are serious about the market stability… and we’d like to make sure we do everything we can.”