Trump and His Gulf Friends Win Big in OPEC Deal Saudi Arabia is set to gain market share from Venezuela and Iran. By Julian Lee 10 June 22, 2018, 1:02 PM EDT More oil, you say? Photographer: Anadolu Agency/Anadolu OPEC’s decision to “strive” to bring compliance with their output deal to 100 percent means that more oil will hit the market in coming weeks. And most of that oil will come from Saudi Arabia at the expense of Venezuela and Iran. That's a big win for President Donald Trump and Saudi Crown Prince Mohammed bin Salman. As I noted earlier this week, a compromise at this OPEC meeting would require the group to abandon individual output targets and Iran to cede market share to Saudi Arabia. That’s precisely what has happened, even if no OPEC oil minister will admit it in public. Over Compliant A collapse in Venezuela's output and sliding Angolan production has pushed OPEC cuts well beyond their target. Source: Bloomberg, OPEC have asked Japan to completely halt oil imports from Iran, according to people with knowledge of the matter. That goes much further than the reductions demanded under the Obama administration, which sought cutbacks of around 20 percent every six months. I have long been of the opinion that the drop in Iranian supply would be much bigger than the 200,000 to 300,000 daily barrels that several analysts have been forecasting. With pressure likely to be exerted on buyers of Iranian crude in Europe and elsewhere in Asia, Iran’s output could easily drop by a million barrels a day by the end of the year. President Trump’s sanctions on Russian aluminum producer Rusal should serve as a warningto purchasers of Iranian oil. This U.S. leader doesn’t care about the disruption that the sanctions will cause to friends or foes alike. Returning to Friday’s output agreement, the official communique was a classic piece of OPEC-speak — short on figures and something that everyone could claim as a victory. The performance of the United Arab Emirates’ oil minister and OPEC President Suhail Mazrouei was a master class in how to avoid a question. He was repeatedly asked whether countries with spare production capacity — mainly Saudi Arabia — would be able to make up the volumes that others can’t produce. And he repeatedly avoided giving a specific answer. That has allowed Iran’s oil minister to leave the meeting claiming that he got exactly what he had always been asking for: 100 percent compliance with the existing agreement. He conveniently forgot that he had quite explicitly said that should be 100 percent compliance with each member’s individual target, not a redistribution. But the outcome is obvious. Market share will be redistributed among OPEC members. By the end of the year we could be looking at the transfer of as much as 1.5 million barrels a day of production from American foes Venezuela and Iran, with most going to U.S. ally Saudi Arabia. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. To contact the author of this story: Julian Lee at jlee1627@bloomberg.net To contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.net
So it's a bad thing that Iran and Venezuela lose and SA and the UAE, our actual allies, win? Typical Bloomberg.
Of course. It is Iran and Venezuela that ones that are supposed to win in this TDS liberal-minded media world we live in.