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OPEC Says No To Iran
By Micah Halpern

Monday March 2, 2009

I've Been Thinking:

Iran is again taking it on the chin again.
This time they are getting it from the Sunnis in the region.

According to a report issued on Sunday by IRNA, the Islamic Republic News Agency, Iranian Oil Minister Gholam Hussein Nozari has been informed that OPEC has rejected Iran's appeal to limit oil production.
This is bad news for Iran because they cannot manage with the current prices and need to limit output in order to increase the price per barrel.

OPEC has even sent out a message saying that at their March meeting, limiting oil output will not even be up for discussion.

There are reasons for their decision.
The first reason is that everyone in OPEC wants the price to increase, but if a limit is set there is an incentive to violate it and make more money. Countries will cheat and that will challenge the very objective of the cartel.

The second reason is Shiite versus Sunni tensions.
Iran is Shiite, the rest of OPEC is Sunni and they want to apply pressure and ultimately pain to the Shiite leaders of Iran.

We must neither forget nor minimize the role of internal issues in the Muslim world. More often than not, these internal issues are the most significant motivational forces in the region.

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4 June 2017 12:13 PM in Thoughts

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