Oil: Both Saudis, US Playing for That 1 Unturned Card - Iran
investing.comA week ago, Saudi Crown Prince Mohammed bin Salman sat with Iranian Foreign Minister Hossein Amir-Abdollahian in Jeddah for a meeting — or more importantly photo opportunity — he intended the world to see.
This week, the Saudis and five others, including notably Iran, reaffirmed their desire to join BRICS, the economic alliance led by Brazil, Russia, India, China, and South Africa, with Riyadh also announcing a $16 billion investment.
Once the bitterest enemies of the Arab world, the Saudis and Iranians seem closer than ever.
Yet, something else is brewing that could test their fledgling diplomacy: More-than-expected Iranian barrels coming onto the oil market.
That second phenomenon became evident this week after Reuters, citing influential secondary sources on oil production, reported that August oil output from OPEC, which stands for the Saudi-led 13-member Organization of the Petroleum Exporting Countries, climbed by 220,000 barrels per day. That was largely due to a jump in Iranian supply, the report said.
Iran is a founding member of OPEC, which was established in 1960. But since 2018, it has existed as more of an outcast within OPEC due to sanctions on its oil exports imposed by former US President Donald Trump, who accused the Islamic Republic of trying to develop nuclear weapons.
The sanctions were once a major burden to the Iranian economy. These days, they cause little hurt to Tehran, thanks to little enforcement of them by the administration of Joe Biden, the Democrat president who succeeded Republican Trump.
Into their sixth year, the sanctions allow Iran the privilege of being excluded from every production cut carried out by OPEC. Lack of enforcement over the sanctions means Tehran can export as much
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