Tehran’s OPEC representative on Tuesday hit out at fellow cartel member Saudi Arabia for pumping extra oil into the market as Iran's crude exports were targeted by Western sanctions.
“Increasing production by some OPEC members, especially Saudi Arabia, will create instability in the market and will likely lead to a serious decline in oil prices which undermines OPEC’s goals,” Mohammad Ali Khatibi was quoted as saying on the oil ministry's news website SHANA.
“It is better for OPEC members to let the global market determine the price of oil and avoid making unilateral decisions,” he added.
U.S. ally Saudi Arabia has increased oil output this year to make up for a shortfall in Iranian crude confirmed by OPEC and market analysts.
Iran, which denies any decline in its oil exports, is subject to U.S. and EU measures making it more difficult for it to ship out its oil. Those sanctions are to be ratcheted up further on July 1 when an EU embargo on Iranian oil comes fully into effect.
The Islamic republic has several times this year slammed Saudi Arabia and Kuwait for opening their oil taps wider.
Saudi output grew by 250,000 barrels per day (bpd) in the first three months of this year, compared with the same period last year, to a total average of 9.9 million bpd in April, according to OPEC’s estimate.
At the same time, OPEC’s estimate showed Iranian production dropped by 300,000 bpd to 3.2 million bpd, its lowest level in 20 years. Iran disputes that, saying its output has increased to 3.8 million bpd.
The price of oil has dropped sharply in the past couple of months, to around $90 a barrel for U.S. West Texas Intermediate crude compared with $110 a barrel at the beginning of March.
Iran, the second biggest producer in OPEC after Saudi Arabia, relies on oil exports for more than two thirds of its foreign revenues and has maintained a hawkish position on OPEC price decisions.