OPEC is set to debate an extension of oil production cuts when it meets on Monday, before getting the deal endorsed by non-members such as Russia on Tuesday.
Russian President Vladimir Putin said over the weekend that the non-OPEC leader had agreed with Saudi Arabia to extend supply cuts by at least six months. Meanwhile, Saudi Energy Minister Khalid al-Falih said Sunday that the deal would most likely be prolonged for nine months and no deeper cuts would be required.
Speaking to reporters in Vienna, Austria on Monday, Zanganeh said: “The important thing to me is that OPEC remains OPEC. It has lost its authority and it is on the verge of collapse.”
“Iran is not going to leave OPEC… But I believe OPEC is going to die if these processes continue,” Zanganeh said, referring to Russia-Saudi decision.
OPEC and its allies have been reducing oil output since 2017 to prevent prices from sliding amid soaring production from the U.S. — which has become the world’s top producer this year ahead of Russia and Saudi Arabia.
The U.S. is not a member of OPEC, nor is it participating in the supply pact. Washington has demanded Riyadh pump more oil to compensate for lower exports from Iran after slapping fresh sanctions on Tehran over its nuclear program.
Iran’s oil minister said it would have no problem with an extension of OPEC-led production cuts but warned that members of the producer group had not gathered in the Austrian capital in order to “stamp” a decision that had already been agreed.
When asked why an agreement appeared to have been reached in Osaka, Japan at the G-20 summit last week rather than in Vienna, Zanganeh replied: “This is my question too.”
OPEC was not immediately available to comment when contacted by CNBC Monday morning.
Iran wants to take OPEC decisions ‘back to Vienna’
Iran, which was OPEC’s third-largest oil producer prior to the re-imposition of U.S. sanctions, said it would not support a long-term charter of cooperation between OPEC and outsiders that was supposed to be agreed this week.
“The Iranians want higher oil revenue, they need higher prices so they are not going to oppose an agreement. They would support it going deeper in terms of a cut but they did declare that they are opposed to this charter arrangement which would formalize the non-OPEC and OPEC agreement,” Helima Croft, head of global commodities strategy at RBC told CNBC’s Dan Murphy on Monday.
“It is something that the heavyweights in OPEC wanted so I would say the Gulf states, Saudi Arabia, UAE, the big non-OPEC player Russia… This is what they were looking to do but I think that is precisely why Iran is drawing the line in the sand on this.”
“They have basically said they don’t want OPEC decisions being made by a small number of countries outside the secretariat. They are looking to take OPEC decisions back to Vienna, back to the OPEC secretariat and have all members involved in the decision-making process,” Croft said.
— Reuters contributed to this report.