World

Iran: Fall in Oil Prices is ‘Treachery’

An oil technician in an oil field southwest of Tehran. (AP Photo)
An oil technician in an oil field southwest of Tehran. (AP Photo)

ALI AKBAR DAREINI, Associated Press

TEHRAN, Iran (AP) — Iran’s President Hassan Rouhani said Wednesday that the sharp fall in global oil prices is the result of “treachery,” in an apparent reference to regional rival Saudi Arabia, which opposed production cuts.

Oil prices have plunged by more than 40 percent since June to around $65 a barrel, placing severe strain on Iran’s economy, which is already hobbled by international sanctions imposed over its nuclear program. An OPEC meeting last month failed to reach agreement on production curbs, mainly because of Saudi opposition.

Rouhani told a Cabinet meeting Wednesday that the fall in prices is at least partly “politically motivated,” the result of a “conspiracy against the interests of the region, the Muslim people and the Muslim world.” His comments reflect concerns among Saudi Arabia’s rivals that the kingdom is capable of withstanding the revenue losses and is forcing lower oil prices to damage their economies.

“Iran and people of the region will not forget such conspiracies, or in other words, treachery against the interests of the Muslim world,” he said.

Sunni Saudi Arabia and Shiite Iran are longtime rivals that are fiercely divided over the civil war in Syria, where Iran and Russia support President Bashar Assad while Saudi Arabia backs the mainly Sunni rebels fighting to topple him.

OPEC controls about 40 percent of the world oil market and Saudi Arabia, the largest oil exporter, produces nearly 10 million barrels a day — a third of the OPEC total. Riyadh has thus far refused to go along with Iran, Russia, Nigeria and Venezuela, all of which heavily rely on petroleum exports and want to drive prices up. Saudi Arabia maintains it is opposed to cutting production because of fears its market share could erode.

OPEC’s failure to agree on production cuts accelerated the decline in the price of oil, which was already sinking in part because of weak global economic growth and a U.S. oil boom that has swelled supply.

 

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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