Saudi-Iran showdown is expected at today’s meet over cap

Saudi Arabia and Iran’s rivalry would once again expected to dominate today’s meeting between members. The problem is that both of them are very low cost producers of crude oil and among the last persons to care about lower prices, however many members are likely to point out that their rivalry is killing the organization as well as some members like Venezuela.

The meeting has officially began in Vienna at 10 am local time.

First there will be a two hour opening session, which is expected to be followed by 3-4 hours of closing session beginning 12 noon. Final press conference is expected at 4 pm local time at OPEC Secretariat.

This is Saudi Arabia’s new oil minister Khalid al-Falih’s first meeting as minister and he is expected to call for balanced approach and re-installment of production quota from OPEC, which Iran is expected to reject for obvious reasons. He is expected to make offers to other members in rebuilding OPEC, which has pushed oil prices somewhat.

Brent briefly breached $50/barrel on the rumors but threw away the gains soon enough as Iran has squashed hopes for any common consensus, without giving it special accommodation.

Key question is –“Will there be smaller OPEC within a larger one?”