Iran has rejected a plan by Russia and Saudi Arabia to increase oil production at a meeting of the OPEC oil cartel this week in response to consumer disgruntlement with rising prices.
"I don’t believe at this meeting we can reach agreement," Iran's oil minister Bijan Zanganeh told reporters after arriving in Vienna, where OPEC is headquartered, on June 19.
Moscow and Riyadh have proposed reversing most of a 1.8 million barrels a day cut in production that OPEC and other major producers agreed to in 2016 amid recent calls by the United States, China and other major oil-consuming countries for relief from rising pump prices.
But Iran has signalled its opposition along with Iraq, Algeria, and Venezuela, three other influential OPEC members. Zinganeh cited recent demands for a production increase from U.S. President Donald Trump as a reason to oppose it.
Trump has "created difficulty for the oil market" by imposing sanctions on Venezuela and Iran, Zinganeh asserted, leading to lower production and higher prices.
"And now he expects OPEC to change something for better prices," he said. "That is not fair. OPEC is an independent organization, not an organization to receive instruction from President Trump... OPEC is not part of the Department of Energy of the United States," he said.
Premium crude prices have surged nearly 75 percent to almost $80 a barrel since the Organization of Petroleum Exporting Countries and allies such as Russia, Kazakhstan, and Mexico agreed to a production cut in late 2016.
OPEC is due to meet on June 22 to review the agreement, and plans to meet the next day with Russia and other non-OPEC producers that joined the agreement in 2016.
Stressing his opposition to reversing the production cuts, Zanganeh said he plans to leave Vienna before the planned talks with Russia.
Iran's opposition to raising oil output puts it on a collision course with Russia, which has called for raising production by 1.5 million barrels a day, in a near-total rollback of the 2016 production cuts.
Russian Energy Minister Aleksandr Novak said the need for increased output is urgent during the summer, when demand for gasoline and oil hits a high point for the year.
"Oil demand usually grows at the steepest pace in the third quarter... We could face a deficit if we don't take measures,"Novak said on June 19. "In our view, this could lead to market overheating" -- meaning sharply higher prices.
Novak said that if OPEC and its allies decide this week to raise output, they could review their decision and fine-tune it at another planned meeting in September.
Iraq, Iran, Libya, Venezuela, and other opponents face constraints on raising production and thus would benefit little from a production increase, especially one which would result in lower prices for their oil exports, analysts say.
Russia, Saudi Arabia, and some other Persian Gulf producers, on the other hand, have the capacity to raise output and would benefit the most from an easing of the production freeze, they say.
Saudi Arabia, a close ally of the United States, is particularly under pressure from Trump to offset any production decline caused by the reimposition of U.S. sanctions on Iran in November.
Riyadh supported Trump's decision to withdraw from Iran's nuclear agreement with world powers and reimpose the sanctions.
Beyond that, Russia has warned that continuing to limit supply could encourage increased production from shale oil producers in the United States, who are not part of the OPEC agreement and pose outside competition.
On June 19, the head of Russia's second-largest oil firm Lukoil, Vagit Alekperov, said the 2016 production cuts should be reduced by half and that Lukoil could restore its oil output levels within two to three months.
Without any agreement from Iran and other OPEC members this week, analysts say both Saudi Arabia and Russia may decide to increase production on their own.