Nigeria, Iran In disagreement over OPEC emergency meeting

Iran disagrees with Nigeria regarding the emergency meeting.
A very steep competition is on between Iran and Nigerians as Iranian oil is speculated to displace Nigeria’s.
A call for an OPEC emergency meeting has been made.

Nigeria’s minister of state for Petroleum Resources, Dr Ibe Kachikwu

Reports suggests that Nigeria and Iran are in disagreement over the call for an emergency meeting of the Organisation of Petroleum Exporting Countries (OPEC).

Leadership reports that the emergency meeting of OPEC was called in order to discuss steps to possibly cut down oil production and prop up oil prices.

It will be recalled that on Tuesday, January 12, Nigeria’s oil minister said that a couple of OPEC members requested an emergency meeting, adding that current market conditions support the need to hold such a gathering.

However, Iran and another prominent OPEC member, opposed the call and claimed that the time is not yet right for such an intervention.

Iran disagreed with the premise of an emergency meeting as the country’s oil minister, Bijan Zanganeh, stated that the organisation currently has little intention of making a drastic change.

Zanganeh told Reuters that “There should be an intention to make a firm decision in such a meeting; otherwise, the meeting will have negative impacts on world oil markets. The important thing is that there must be an intention for change, but we have not yet received such a signal.”

The Nigerian Minister of state for petroleum resources, Dr Ibe Kachikwu, had earlier added the nation’s voice to those of other OPEC members such as Venezuela, that are requesting an emergency meeting of the oil-producing nations to address the current oil crisis.

While speaking at a panel session at the ongoing World Economic Forum at Davos, Switzerland, Kachikwu stated that with the oil industry in its current state, the members of the OPEC, which produce about one-third of the world’s oil, needed to do something proactive soon.

He said: “There is a lot of energy around trying to meet earlier. Obviously, some of that is a panic reaction. Do we just sit back and watch? Or do we put more efforts in talking to countries, like Russia, to try to get some consensus of what we need to be doing?”

Latest data from OPEC show that Nigeria has lost its status as Africa’s top oil producer of crude oil, following a fall in production by250,000 barrels per day.

Following the crash of oil price from an average of $114 a barrel in 2014 to less than $30 a barrel presently, Nigeria’s economy, as well as those of many other oil-dependent countries, has had an economic depreciation. Nigeria’s budget is benchmarked at $38 per barrel of oil as the country needs oil price to rally to fund its budget.

There is growing anxiety in the Nigerian oil industry, as the re-emergence of Iranian crude oil now provides options for those willing to buy from Iran.

Experts say Iranian imports are likely to displace the Nigerian and Saudi Arabian crudes, as they seem to have filled the gap since South Africa stopped importing Iranian crude oil.

As the global economy heads for what is potentially a very volatile year, analysts have said that OPEC, which requires a consensus from all its members before it initiates a change, has to make a decision very soon.

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