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OPEC is about to meet to discuss the new production target Saudi Arabia and Iran are once again tit for tat

OPEC is about to meet to discuss the new production target Saudi Arabia and Iran are once again tit for tat

June 2, 2016

[China paint information] Saudi Arabia and Iran may be tit for tat again when the organization of Petroleum Exporting Countries (OPEC) meeting is held on Thursday (June 2). At present, Saudi Arabia is trying to reintroduce coordinated action and set a formal crude oil production target, but Iran opposes this idea

the tension between Saudi Arabia and Iran was a prominent issue in previous OPEC meetings, including the meeting in December 2015, when OPEC failed to reach an agreement on the official output target for the first time in several years

according to several OPEC sources, Saudi Arabia and its Gulf allies will propose to set a new collective ceiling to revive the declining importance of OPEC and end the battle for market share

A senior source of OPEC said, "the Gulf Cooperation Council (GCC) hopes to reach coordinated action at this meeting." The committee, for example, measures the tensile stress of the specimen to a given elongation. The force valuers include Saudi Arabia and its Gulf allies Qatar, Kuwait and the United Arab Emirates

it is worth noting that the daily output of OPEC crude oil is about 32.5 million barrels, and any upper output limit below this level represents the actual production reduction of OPEC

Khalid al Falih, the new Saudi energy minister, was the first oil minister of the member states to arrive at the OPEC meeting in Vienna this week, which shows that although other member states are worried that Saudi Arabia is no longer keen to let OPEC determine the production level, he still attaches great importance to the organization

at the previous meeting held in December 2015, OPEC failed to determine any production policy, including the official production ceiling of 30million barrels per day. In fact, 13 member states were allowed to continue to produce at will in the case of oversupply in the market. As a result, oil prices fell to a more than 10-year low of $27 a barrel in January

however, oil prices have rebounded to around $50 since then, driven by the global supply disruption. Events affecting crude oil production include the severe impact of low oil prices on U.S. shale oil producers, thereby reducing production. In addition, there are mountain fires in Canada, attacks on oil pipelines in Nigeria, an OPEC member country, and a decline in production in Venezuela, another member country

is not the reason why China's real economy has been destroyed. Can this OPEC meeting reach a practical agreement

in fact, at present, the outside world does not expect any production restriction agreement reached at this OPEC meeting. If Saudi Arabia and Iran can reach any agreement, it will be regarded as a major accident by the market. In the past two years, due to the proxy wars between the two countries in Syria and Yemen, the market has long been accustomed to the conflict between them

Saudi Arabia actually killed the global production freeze plan aimed at stabilizing the oil market in April. At that time, the country said that as long as Iran also agreed to freeze production, it would join

in the past year, Iran was the biggest stumbling block for the organization of Petroleum Exporting Countries (OPEC) in negotiating production policies. Despite the outcry of other Member States to freeze production, Iran still increased supply, which previously insisted that it should be allowed to increase production to the level before Western sanctions

Iranian oil minister Bijan Namdar Zanganeh made it clear on Wednesday that Tehran would not support any new overall production ceiling, and hoped that the discussion would focus on the more fundamental issue of national production quotas. He said, "the overall production ceiling is not good for us."

shangani also pointed out, "one of our main ideas is to set production quotas for individual countries. But I don't think we can reach an agreement on this at this meeting." He also said that Iran currently produces 3.8 million barrels of crude oil per day, which will soon reach the level of 4million barrels before the sanctions

however, if OPEC fails to reach an agreement on any output policy on Thursday, the market will once again believe that its major member countries may try to increase production further regardless of low prices in order to seize market share

UAE oil minister mazruyi said that the oil market is still far from rebalancing due to serious oversupply, and the oil price may be further revised

the Venezuelan energy minister also warned that the supply disruption in recent months has pushed up oil prices, but once oil production resumes, the global oversupply situation may intensify again

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