SHANA -- Irans Minister of Petroleum Bijan Zangeneh said the Joint OPEC/Non-OPEC Ministerial Monitoring Committee (JMMC) is not legally competent to make decisions about adjustment of production quotas.
In an interview with Platts and Bloomberg in Tehran, he said that all decisions will be adopted only in the OPEC oil and energy ministers meeting in the
presence of all member states and based on unanimity.
The interview was carried out ahead of September 23 JMMC meeting in Algeria.
Shana publishes the full text of the interview.
Will you attend the JMMC meeting next week?
Im not going (to the meeting). Mr Kazempour, will head the Iranian delegation in Algeria.
But Irans position in terms of the current agreement, for the decision that will be made in the ordinary meeting, what does Iran want to say in Sundays meeting
We believe that this meeting doesnt have any decision-making rights. The JMMC doesnt have the authority nor is it legally qualified to reach decisions, not on any issue. Its observations arent determining either. It only observes and monitors and its just watching, observing and it gives a report in the meeting exclusively for the ministers meeting. The JMMC has no right to make any decisions. Im going to say something now in general about OPEC, theyve made something called the Declaration of Cooperation, we celebrate it and appreciate it a great deal. Especially the non-opec members that have joined us in the past two years, especially Mexico and Russia, who have worked with us and have really helped us stabilize the market very much. But, the DoC is not supposed to replace OPEC.
My analysis now is that OPEC is the victim of a creeping situation thats a result of both cooperating with the U.S. and fear of the U.S. NOPEC bill. They are sacrificing OPEC, they are destroying OPEC and slowly, slowly, without directly saying so, they want to gather some names together to create a forum to replace OPEC.
We never believe in the idea that you should commit suicide for fear of death, well carry on what were doing. In the nearly 60 year life of OPEC this sort of thing has happened 10 times or more and there will be more ups and downs. You mustnt just sacrifice OPEC out of fear OPEC is one of the third worlds biggest accomplishments in my view, not just in terms of oil producers, but its an organisation that can be effective in the worlds economy and its a good, strong foundation.
And so there are some who want dismantle this and they want to make this thing [JMMC] much bigger than it is, out of proportion, pointlessly. If you pay attention youll see they are making this OPEC/non-OPEC meeting into a big deal whereas its not important. This entire story around OPEC and non-OPEC was about cutting 500k barrels. The restof the countries, they havent cut anything. In fact, they didnt have production capacity. Look at those countries who cooperated with us. We are thankful that theyve cooperated politically and sympathised with us, but they all produced under their quotas and thats why some of them, their compliance reached nearly 200 percent and 180 percent. They couldnt produce at all. Apart from Russia and to some extent Mexico.
Russia has helped a while and theyre not our problem in this situation right now, they helped and then that period will expire, and they can cooperate as much as they want based on their own interests as a country thats a non-OPEC producer. But from the OPEC countries I have higher expectations, and particularly in the current situation and Ive said this many times before its not appropriate that two members start leading and taking on the leadership of an anti-Iranian current.
(You mean UAE and Saudi?)
Im not mentioning any names at all. But the two members of OPEC are taking the helm of global anti-Iran campaign in the oil makret, this is completely obvious and its not right. Its not right as neighbours nor as cooperators. They take on this anti-Iranian tide and then they also take onboard cooperation with America in order to hurt Iran, and then they pull some non-OPEC members along with them who dont necessarily understand the depth of the political complexity and the other aspects that I dont want to explain here
For instance they will say something like we wont let there be a shortfall in the market, which on the surface is a very good thing to say or is economic. But in my opinion such a statement has nothing to do with economics and is 100 percent political and against Iran. Anyone who says they will compensate for the shortfall in the market, is speaking against Iran. And its a political statement, I do not see this as economical. Theres no economics in it. And they are, contrary to what they say, theyre actually drawing not only OPEC but also non-OPEC countries into a political game. But because this political game is one that is working in tandem with U.S. policies, some people dont want to speak up about it.
No, OPEC and some non-OPEC countries are working in line and with moving along the approach of the U.S. Unfortunately a part of the secretariat is also moving in this direction and we realise this. And I want to notify the Secretariat hereby to be careful about its work, a part of its works, and remind them that OPEC is an independent organization, it is not a subsidiary of the Department of Energy of the United States, its officials must pay attention to this.
What matters is the members will. We dont have big members or small members, everyone is equally participating and they have to take everyone into consideration. And my main issue is that, inflating the JMMC meetings and I was head of the OPEC's Ministerial Monitoring Committee for eight years at one time they never had all this fuss and noise before.
Even so, even with non-OPECs, they dont make much of a difference anyway.
(You have spoken very positively of Russia. But apparently, Russia and Saudi Arabia are together)
Zanganeh interrupted the question:
I said before. Some have complicated political objectives, which they express it in simple, economic terms. While, they are not economic at all. When they say we will sort it out [oil shortage in market], any wise person says thats right, demand and supply should be balanced naturally. But if you look at it a bit closely, it is not an economic argument. It means a signal to the US: put as much as pressure you want on Iran, and we wont let the market face any problem. This is what we should get. This is a political message. I dont believe that Russia wants to cooperate with the US and blow a strike to us. But some others do.
(Whats the JMMCs role in pursuing the US will?)
. It is not to make a decision or determine or distribute quotas a group here has made up something against Iran and assume that they can succeed. These are bad intentions. I tell them that its not appropriate what they do,
(Have you talked with other OPEC members and Russia to help reverse these moves that are in line with the US objectives?)
I dont say that Russia is acting in line with the US objectives. Russia is big enough not to do so. But some might take advantage of Russias cooperation. I have contacted some of the ministers, talked to them, wrote letters and explained to them, recently. I drew their attention to this issue.
(Only to OPEC members?)
No. Outside OPEC too,
(You have written some letters to OPEC secretary general about some members not abiding by the agreement)
Yes. They are violating and they want to bring OPEC on board and pursue their illegitimate works. They are both overproducing and insinuating a wrong understanding from OPEC agreement. If they want to produce excessive, we cannot stop them. There is no forcible instrument in OPEC. But they shouldnt do it in the name of OPEC. They should come out and say the US has phoned and told me to increase output. And I have no other way but to do so. Today, some of these countries tell us oh we cannot take much more oil from you [Iran]. Please understand us. We have long relation with US and we cant ignore what it wants. Ok! We dont want to fight with each other. But dont say its what OPEC said [decided]. They should say its their own decision because they can, it is what it is, take it or leave it. They should say we increase the production because we can and we dont listen to anyone. I cant stand against the US. But dont put it on OPEC. And I think that is why they are destroying OPEC.
(Are you worried about OPEC as a founding member?)
Yes. We are worried but rather about Iran itself. I want that organization for Iran, not the other way around. We established an organization, from which the third world has benefitted so far. It still can play a role. But the world changes. It has developments. We shouldnt forget one principle which is power. Influence comes from power, not reasoning. This is very important
OPEC has ups and downs OPEC basically makes sense when it cuts output. When prices are high and the market is demanding, everybody does what it wants. OPEC is meaningful when it wants to cut production in order to raise prices. There, it is influential,
What I mean is that if we are not careful, we will be digging OPECs grave with our own hand,
(Have the ministers to whom you wrote responded yet?)
No. The letters are reaching them,
(Do you think Saudi Arabia and Russia can produce more than the amount they have pour into the market so far?)
Some countries are relying on their inventories. They give some numbers for their inventories but I dont know if it is true or not. I dont know these inventories that Saudi Arabia says it has outside the country and elsewhere are real or not. But from now on, I think, they will rely on their inventories to pour into the market not production. I think they dont have extra production capacity. But eventually, it wont last long. No international analysis say that missing Irans oil can be tolerated in a long run.
(Iraq is increasing its output)
No, it cant. Iraq hasnt increased its production. It is a long while that its production has stayed fixed. There is a reason,
I dont talk about production, neither about its figure, the exports, destinations. I wont say a word because the Americans have assigned resources, civil forces, not military ones, in many ports and countries and they are controlling, watching and carrying out an intelligent monitoring. They watch our people. I dont want to give them additional information,
I dont want to brag today for them, neither do I want to explain my countermeasures. I dont want to say how much we produce. These all would help them to obtain free information. I am not going to give them that. The oil industry is working with full force. I wont give information. We will see eventually,
(Do you confirm 35% down exports since April?)
I dont give any figure,
(What about tankers and shipment, buyers?)
I dont give any information. Whatever I say, the US will take advantage of it against us. It is like anything you say may be used against you in a court of law, he said with a smile.
I wont reveal what customer, what destination, what countries, with which tanker I ship oil, how I solve my insurance problem,
I wont give any information. And you can write that down.
(Can you say who the buyers are?)
Nothing. Look if America finds out ... anything that could work in favour of the U.S. I wont talk about it. They will use whatever I say against us.
Im not going to say which customers, which vessels Im using or how I send it or how I solve my insurance problems. Im not going to talk about these because it works to their advantage.
(If the forthcoming JMMC meeting reaches a decision thats outside the authorised proposal does OPEC have an approach on what to do ...)
Its void. Its invalid, its a void decision. Such a decision is illegal. The JMMC has no decision-making rights. I will say this, that in general the JMMC has no right to make decisions. Any decisions are invalid. It can only observe and report. Decisions can only be made at OPEC meetings in the presence of all OPEC members and by consensus of members.
The place for decisions in at OPEC. This [JMMC] is monitoring only. All this fuss, advertising, promotion and placards this is just to propagate for pulling OPEC apart.
(If the JMMC enters the ministers meeting at OPEC...?)
Well, ok. Without a moments hesitation, I will definitely veto any decision that threatens our national interests. Without a moment. Vetoing means that that decision isnt legal ,its illegal if theres a veto
(So right now you wont be at Algiers, if they make a decision)
They cant. Theres no OPEC at work there.
(You will veto any decision that comes to OPEC?)
I said that any decision that poses even the smallest danger to our national interest, without any hesitation at all, I would stand in its way. Im there for my own national interest alongside everyone else, everyone is like this.
(What are your views on this current agreement and its continuation?)
The agreement doesnt really exist anymore. Its finished. Russia came long, cut 300k barrels and then got that 300k back then its over. Theres no agreement left really. I talk to OPEC. I dont have much to say to non-OPEC.I am addressing OPEC. I respect their [non-OPEC] cooperation in the future, but it doesnt need all this propagated meeting, logistics and spending.
(So in the December if they day that they want to renew/continue this agreement, what will your position be?)
We'll discuss it then.
(Do you want a permanent seat on the JMMC?)
No. Not for something thats just observing and monitoring and only monitors, why would I need that. All my time and efforts and those of my colleagues is being focused right now on this economic war that America has started against us.
(Do you think the way that OPEC members, Saudi and Iraq in terms of production increase, do you agree that they are using OPEC as a political tool?)
I said that some OPEC, I havent mentioned any names. Ive said some OPEC members, contrary to everything that theyve said themselves and contrary to their own motto against politicizing OPEC, they are actually politicising the entire organization in order to execute the will of the U.S. And they are laying the groundwork for them (U.S.). When they say we have no problem in securing the market what they mean is, come on Mr. America, sanction Iran as much as you want and destroy the people of Iran and its not a problem, we are by your side. Politically, this is what it means. Its cooperation with the U.S. in sanctioning Iran.
Anyone who says this is cooperating with the U.S. Whoever says it, whoever at all, says we will make-up for any shortfall in oil is going along with the Americans and is giving a greenlight to the Americans to sanction Iran, to exacerbate Iran and to deepen sanctions against Iran
(Have there been any new agreements with Russia?)
There are always new agreements.
(In relation to oil exports or anything)
On exports, as I said, I wont say anything.
(So there are new agreements or they are in the process of being made, or theyve been signed?)
Now, its good. Weve moved forward.
(In the time that theres been this agreement, has any share of any OPECs gone to non-OPECs?)
Look, OPEC wont give any share of anything to anyone. Persian Gulf countries wont give-up a single barrel of their market share to anyone, unless they cannot produce.Even what they cannot produce, that they wont give that up either. Practically they dont have it in hand, maybe theyll tell the other side, we [give it] to you] but they havent been able to use it themselves. If theres food that they cant eat, maybe theyll donate it somewhere. But they wont even let one barrel go.
(If you accept that Irans oil production will drop or its exports will drop, will we have negotiations with OPECs beforehand like we did in 2013 and 2014 for the return of Irans barrels to the market)
No Ive already written to them that, firstly exports arent part of OPECs criteria, only production. And Ive written before, for this next meeting, that if anything happens to my exports or my production, after the differences have been resolved, regardless of any decision, without the need for any approval at all, I will return to my original production. Without the need for obtaining any approval I will return to my prior production. Ive told this to OPECs and Ive said it again.
(How do todays sanctions and situation differ from the situation in 2011?)
Well it was UN Security Council sanctions then. This is just the bullying of the U.S., at that time it was multilateral, international sanctions. Right now, no country apart from Israel and two other countries in the region two of our Arab brothers no one else is with the U.S.
(But they are cooperating ...)
No. Cooperation if youre bullying and holding a sword it is something else ... but these sanctions are not legal and its not like everyone is afraid of the UN and contravening some laws.
Right now, from one perspective its harder and from another perspective its simpler. Its harder from this point of view that the U.S. has all the experience of the previous time, and its already worked out some of our methods/workarounds and therefore we have to use more complicated, new methods and the U.S. is a lot more persistent, especially given the U.S. have made up its mind to cut out production to a great extent in November even if in a symbolic way. In my opinion this is very symbolic for them.
And we are doing all that we can, making all efforts and I dont want to say how much and to what extent weve been successful, because he (U.S./Trump) will find out. That [previous] round was UN-related, UN sanctions are very heavy in terms of the law, meaning that anyone who violated the sanctions was subject to all the international laws and regulations. Now this is just America that is throwing its weight around, its holding up a sword and calling for challenge over everyone. And now, well do what we can do and God Willing, God will help us if we are honest.
(Rick Perry, Falih and Novak met recently, do you think this was just promotional/propaganda or how much was it about affecting production?)
No I think this is all mostly propaganda. The Americans routinely go to different places, following, threatening, they go here and there and doing whatever is that they do and we know about what they do. Any company that contacts us, they contact them half an hour later, they talk to them, they routinely monitor and eavesdrop and follow and keep an eye on our managers. They are clearly following everything.
(Whats your analysis of the current state of the market and in the months ahead, considering winter is ahead, what does the market need? More barrels?)
You have to understand from price change trends. The Americans are trying really really hard to prevent prices from going up until November. But if you take a look, the trend for prices right now is upwards and they bring prices down with an intervention. But if they leave it alone, the price trend is to rise and to keep rising.
(Whats a suitable price for oil right now?)
Right now, a suitable price is $80. Now, the higher it gets the better it is for us. But it wont. The U.S. and some OPEC members are not allowing it through their meddling.
(Some sources have said that Saudis want high prices above $80)
No, not right now.. The U.S. doesnt want WTI to go up, if it goes up Trump wont get the votes heyre putting all their efforts into WTI not going up. He brought it under $60 and now its going up. As soon as it goes up, they throw in some from storage, from here and there and they wont ever tell the truth about what theyre doing. But the DOE report on production said that the market cannot sustain Irans absence from the market. It cannot tolerate Irans removal from the market.
(Do you think that if production really drops heavily, how much will the price of oil go up? In the worst case scenario)
The higher it gets, the better.
(What needs to happen for these sanctions ... what has to happen, does Mr. Trump have to go? What will and needs to happen in your opinion, what can Iran do? Iran has to do something)
Right now, I dont want to enter these discussions.
(Well something has to be done, Iran cant just keep going till it hits a dead end?)
Now Trump could do so and it would be good for him to suspend the sanctions.
(In Vienna I remember you saying in terms of Russias oil supply, were neither friends nor enemies is that still your view?)
Its always my view. Its not about being friends, brothers or enemies.
(And Russia, whats your view on the fact that it says on the one hand its against the sanctions but then on the other hand it will secure oil supplies?)
Ask them, you need to ask them.
(Can you say where the Iraq-Iran swap is at?)
Its underway. its coming on truck and its being received.
(Do you want to increase it?)
Yes, we would like to and we are after increasing it.
(and in terms of sales of oil to Russia, are you seeking more than the current level [100k]?)
We are keen to provide more oil to everyone.
(Is Iran using discounts more now, as a tool?)
No its not really that important
(So what is Irans position on the current agreement, will you support it?)
Well see at the time.
(Would the US be able to reduce Irans oil exports to zero or its just a bluff?)
I think that Mr Trump has made such decision without consulting experts even within the US administration to reduce Irans oil exports to zero and he insists obstinately on implementing his decision. But he recently realized that such decision is impossible and therefore he is seeking to reduce Irans oil exports to zero, albeit symbolically, for one month. Therefore, Mr Trump is seriously trying his best to reduce Irans oil exports to zero. Of course this is just one side of the coin as we have not our hands and feet tied. In addition to making our best efforts we believe that divine hands are at work.
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