VIENNA: Iran's oil minister walked out of a key meeting with OPEC peers on Thursday, as a rift deepened with regional rival Saudi over its push to ramp up the cartel's oil output.
"I do not think we can reach an agreement," Bijan Namdar Zanganeh told reporters at his Vienna hotel after storming out of talks with a group of ministers on the eve of a crucial OPEC meet.
The talks were meant to lay the groundwork for Friday's gathering of the 14-nation Organization of Petroleum Exporting Countries (OPEC), when the cartel will discuss easing a supply-cut deal with 10 partner countries that has cleared a global oil supply glut and pushed crude prices to multi-year highs.
The output curbs have been in place since January 2017 but Saudi Arabia, backed by non-member Russia, is now pushing to raise production again in order to meet growing demand in the second half of 2018.
But the proposal has run into resistance from Iran, Iraq and Venezuela, who would struggle to immediately raise output and fear losing market share and revenues if other countries open the spigots.
Iran is particularly vocal about its objections as it braces for the impact of fresh US sanctions on its oil exports after President Donald Trump quit the international nuclear agreement.
But Riyadh, which cheered Washington's exit from the nuclear pact, is under pressure from Trump to boost output in order to lower oil prices ahead of November's midterm elections.
Saudi Energy Minister Khalid al-Falih had earlier signalled a compromise could be in the works.
He acknowledged that a big production hike might be "politically unacceptable" to some OPEC countries and said it was important to be "sensitive" to those concerns.
The 24 nations in the pact, known as OPEC+, initially agreed to trim production by 1.8 million barrels a day but they have actually been keeping more than two million bpd off the market.
Observers believe a face-saving deal could be brokered if members simply stopped over-complying with the current pact, and agreed to stick to the original reduction quotas -- which would bring several hundred thousand more barrels to the market each day.
But that is easier said than done since much of the shortfall has come from Venezuela, where an economic crisis has savaged the nation's petroleum production.
Output has also plummeted in Libya, where fighting between rival factions has damaged key oil infrastructure.
OPEC rift deepens as Iran walks out of key meeting in Vienna
OPEC rift deepens as Iran walks out of key meeting in Vienna
Marine insurance companies are considering canceling, repricing policies in the Middle East
RIYADH: Marine insurance companies are considering canceling or repricing policies in the Middle East, according to the Financial Times
This comes after the US and Israeli strikes on targets inside Iran, followed by missile attacks and retaliatory military actions in several countries in the region.
Marine brokers expect insurance premiums for ships to rise by up to 50 percent, given the region’s classification as a “war zone.”
Ship owners are considering rerouting their vessels to avoid the Strait of Hormuz and reduce risks to crews and cargo.
20% of the global oil supply passes through the Strait of Hormuz.
Regarding oil prices, a rise is expected as 20 percent of global oil supply passes through the Strait of Hormuz, amid concerns about continued tensions in the region.
Air traffic in the Middle East was severely disrupted after several countries closed their airspace completely or partially, while regional and international airlines suspended or rescheduled flights.
On the morning of March 1st, the Iranian capital, Tehran, witnessed several large explosions following Israel's announcement of what it described as a “preemptive strike.”
Flights to countries in the region suspended due to attacks
In a video message, US President Donald Trump announced that the US had begun “major combat operations” in Iran, asserting that the goal was to defend the American people by neutralizing what he described as the “imminent threat” from the Iranian regime.
Several regional and international airlines announced the suspension of their flights to some countries in the region due to the attacks.
These military developments come at a time when major shipping companies had already avoided the Red Sea and Suez Canal routes due to security tensions, reverting to the Cape of Good Hope route, which increases shipping costs and puts pressure on global supply chains.
With the closure of airspace in several countries in the region, the risk of disruption to air traffic and trade is increasing, while oil markets are watching closely for any signs of potential supply disruptions from a region that is one of the world's most important energy production hubs.
