Azerbaijan, Baku, July 3 /Trend S.Isayev, T. Jafarov/
Hardliners like Iran are pushing for lower production and higher prices, contrary to Saudi Arabia, Senior fellow at Nanyang Technological University's S. Rajaratnam School of International Studies, James M. Dorsey told Trend.
The oil output from OPEC has fallen in June as Western sanctions have pushed Iran's supply to its lowest level in 2 decades, relegating it to the organization's third-largest producer behind Iraq.
While OPEC members formally agreed on June 14 to stick to 30 million bpd of production per day, countries like Saudi Arabia have been pushing the limits, to compensate for Iran's sanctioned oil exports.
Supply from the 12 member OPEC has averaged 31.63 million barrels per day in June, coming after a revised 31.70 million barrels per day in May exports, according to Reuters.
Last week, Iranian Oil Minister Rostam Qasemi urged OPEC's secretary general to call for an extraordinary meeting amid falling oil prices, according to country's Oil Ministry.
Qasemi warned that if OPEC members failed to comply with the agreed production ceiling of 30 million bpd this would disrupt balance in the oil market.
In its last meeting in mid-June, OPEC agreed to adhere to the collective limit, implying a 1.6 million bpd cut from the actual supply for 12 members of 31.5 million. To do that, Saudi Arabia would need to cut back sharply.
James Dorsey believes there is very little what Iran can do against the falling prices, except for seeing support from producers like Venezuela.
According to Iran's Mehr News Agency, Iran has established a coalition within OPEC, consisting of Venezuela and Iraq and itself, aimed to reduce oil production and stop the oil prices from falling further.
Mehr says Saudi Arabia is producing around 10 million bpd - an absolute personal record in 20 years - and plans to push the oil prices down to $60 per one barrel.
Iran's exports have been declining due to various sanctions imposed on the Islamic Republic because of its nuclear program.
Europe and the US are trying to squeeze the revenues Iran makes from its oil exports to force it to halt a nuclear program they fear will be used to make weapons, but which Tehran says is for power generation.
July 1 marked the beginning of the European Union's ban on purchasing Iran's oil. The European companies, who insure almost all of the world's oil tankers, will also stop insuring those vessels carrying Iranian oil.
Last month IEA said Iran's oil exports have decreased from 2.5 mbd to less than 2.0 mbd, and this figure is expected to fall even further to 1.5 mbd in the second half of 2012.
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