Iran minister says Russia-Saudi OPEC meeting of 'grave concern' to Algeria, bloc president

Iran does not agree with holding any OPEC+ meeting with Saudi Arabia and Russia in the absence of a clear proposal, the country’s oil minister said in a letter to the bloc.

Countries are increasingly concerned about the ways in which the coronavirus pandemic is impacting the oil industry.

“The vague circumstances around which the upcoming OPEC+ and non-OPEC+ ministerial [meeting] is being organised is of grave concern to me,” said Bijan Zanganeh, who penned a letter to the Algerian oil minister, who is currently president of OPEC+.

Zanganeh said that organising a meeting “in the absence of any clear and consensual outcome (to) convey to the market” would be a message of failure even before it starts, which “may aggravate the current low price environment even further”.

This comes as Russia, Saudi Arabia and allied oil producers agreed to cuts to their crude output at talks later this week on the basis that the United States and others will join in to support and push up prices that have plummeted due to the novel coronavirus.

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OPEC+ will hold a video conference on Thursday after US president Donald Trump said last week that Riyadh and Moscow had agreed to cut a shocking 10 million to 15 million barrels per day, between 10 per cent and 15 per cent of global supply.

Trump has not committed to any action by US oil companies, and the US Department of Energy said US output was already dropping without government action.

This comes as OPEC+ failed to agree on universal production cuts in Match, with Saudi Arabia taking advantage of its ability to produce cheap oil and offering it at discounted prices European markets.

Zanganeh said a meeting “will not be fruitful without first understanding what is the perceived outcome from the meeting, how the meeting is expected to facilitate achieving this outcome, and what might be the likely oil market reaction to it”.

Following OPEC+ talks, Saudi Arabia will host a video conference on Friday for energy ministers from G20 economies to discuss ways to alleviate the effects of the pandemic on energy markets, the group said in a statement on Tuesday.