Saudi-Iran Oil Rivalry Heats Up As OPEC Seeks To Stabilize Price

2016-08-11

(Bloomberg) -- Saudi Arabia and Iran are giving no ground in their market share war, just days after OPEC announced an informal meeting to discuss ways to stabilize falling prices.

Oil’s return to a bear market last week prompted a flurry of words from members of the Organization of Petroleum Exporting Countries. The group’s president Mohammed Al Sada announced plans on Monday to hold an informal meeting in Algiers next month to discuss stabilizing the market, while Venezuelan President Nicolas Maduro said Tuesday he spoke to Saudi Arabia’s king about boosting prices.

The actions of some of the group’s biggest producers, however, were distinctly bearish. Saudi Arabia, the world’s largest crude exporter, boosted oil output to a record 10.67 million barrels a day in July, according to OPEC data published Wednesday. In Iran, production has risen to 3.85 million barrels a day -- the highest since 2008 -- according to comments from Oil Minister Bijan Namdar Zanganeh reported by the Fars news agency.

"It only gives one signal to the markets, that the Saudis are not here to scale back, especially in the face of Iranians bringing more oil to the market," Abhishek Deshpande, an analyst at Natixis SA in London, said in a Bloomberg television interview. When OPEC meets in September "I doubt there’s going to be any concrete agreement."