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Iran: OPEC may 'collapse' if Saudis boost production to cover U.S. sanctions

"I told Mr. Barkindo that OPEC is being threatened due to unilateralism by certain members and this organization is likely to collapse," said Iranian Oil Minister Bijan Zangeneh.

By Nicholas Sakelaris
Iran: OPEC may 'collapse' if Saudis boost production to cover U.S. sanctions
Iranian officials are dealing with ever tougher U.S. sanctions on crude oil, prompting one official to predict the collapse of OPEC. Photo by Armbrusterbiz/Pixabay

May 3 (UPI) -- Tougher U.S. oil sanctions continue to tighten the screws on Iran, making room for other OPEC countries to pick up the slack and prompting Iran's oil minister to warn that the cartel is "likely to collapse."

Iranian Oil Minister Bijan Zangeneh met with OPEC Secretary General Mohammed Barkindo in Tehran Thursday to discuss the matter while White House officials say Saudi Arabia and United Arab Emirates will boost production to make up for the oil Iran can no longer sell into the market. Saudi Arabia is currently pumping 500,000 barrels per day below its quota to keep prices up.

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Zangeneh said the move by the Saudis and UAE goes against Iran.

"Iran is an OPEC member just for its interests and if certain OPEC members want to threaten and endanger Iran, Iran will not refrain from responding to them," Zangeneh said. "I told Mr. Barkindo that OPEC is being threatened due to unilateralism by certain members and this organization is likely to collapse."

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The United States imposed sanctions on Iranian crude oil in November but several countries were granted waivers to continue buying the crude for another six months. On Thursday, the Trump administration officially ended the waivers to several of Iran's biggest oil customers.

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Other countries increased production when the initial sanctions went into effect but haven't committed to increase production again.

OPEC and other oil-producing countries, including Russia, will meet June 25-26 in Vienna, Italy to decide what to do to limit oil supply.

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Despite being an oil-rich country, rumors of gas rationing sparked long lines at gas stations this week in several Iranian cities. Photos and videos showed long lines stretching into the street at gas stations in Tehran, Karaj and Qom. Zangeneh denied that any gas rationing will occur, calling it a "lie" and saying he would give an explanation "later."

Food prices have skyrocketed in recent months and the International Monetary Fund said earlier this week that inflation could reach 40 percent as the country copes with U.S. sanctions.

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