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| OPEC's new ground rule? Don't mention Iran | |
| 2012-06-14 | |
| It is no exaggeration to say the impact of the pending U.S. and European sanctions against Iran are one of the most taboo subjects at an OPEC meeting in years says Robert Campbell. A visitor from Mars could well walk away from the day to day events in Vienna under the impression that the impending U.S. and European sanctions regimes has nothing to do with Iranian oil exports. Ministers and delegates are extremely reticent to discuss the subject of the sanctions, set to take effect July 1, which may well force Tehran, OPEC's No. 2 producer, to slash output.
Instead, ministers focus, at least publicly, on the risks to world economic growth due to Europe's sovereign debt crisis and debate the real size of the growing overhang of oil stocks in consumer nations. The problem for OPEC on Iran is twofold. First, and foremost, no one really knows what the ultimate effect of the sanctions will be so there's no real grounds to make a policy decision. Secondly, despite historical antagonism between Iran and some members of OPEC, notably Saudi Arabia and the other Gulf Arab states, there seems to be at least a tacit agreement not to politicize OPEC policy. Although the market has coped well in recent months with lower Iranian oil exports, this has come at a period of traditionally slack demand for crude. No one is ready to venture an opinion about what will happen July 1. | |
| Posted by:tipper |