Iranian Minister for Oil Bijan Zanganeh said he believes U.S. President Trump is coordinating with some OPEC members to keep oil prices high. File Photo by Maryam Rahmanian/UPI | License Photo
May 11 (UPI) -- There may be certain members of OPEC acting as "tools" for a U.S. government looking to capitalize on shale oil momentum, Iran's oil minister said.
Crude oil prices are trading in the mid $70 per barrel range, supported in part by geopolitical risk and an effort by the Organization of Petroleum Exporting Countries to tighten a once-oversupplied market with coordinated production cuts. Oil prices jumped more than 3 percent this week after U.S. President Donald Trump pulled his country out of the Iranian nuclear agreement with world partners, sparking concerns about additional supply shortages.
Iranian Oil Minister Bijan Zangeneh said in an interview broadcast on Iranian television late Thursday that he believed Trump cut an agreement with certain OPEC members to keep production low in order to support the higher oil prices that stimulate U.S. shale production.
"We [OPEC members] argue that the price of oil at the $60 per barrel range would be better in the long-run, but there are some OPEC members that are acting as tools for carrying out U.S. policies," he said.
Trump's decision to leave the Joint Comprehensive Plan of Action was met with widespread criticism, save for U.S. allies in Israel and Saudi Arabia, the regional arch foe of Iran and de facto head of OPEC. Both sides are locked in a proxy war in Yemen.
Both Saudi Arabia and Iran produced slightly more oil last month when compared with March, a survey from commodity pricing group S&P Global Platts revealed.
Trump in April used Twitter to complain the market was overheated, telling OPEC that "oil prices are artificially very high!" Brent crude oil closed on the day of that message at $74.06, compared with around $77.30 early Friday in New York.
Trump's decision gives Iranian oil customers 180 days to find other reserves and could eventually limit about 1 million barrels of oil from a market with little spare capacity to work with. Iran's oil minister said Tehran has a long track record of coping with sanctions pressure and could easily weather the storm.
"I believe America's withdrawal from the JCPOA would lead to no significant development with regards to Iran's exports of oil and condensate," he said.