Saudi clout on oil questioned after OPEC

BEIRUT, Lebanon, June 23 (UPI) — Saudi Arabia’s defeat by Iran over oil production levels at OPEC’s June 8 meeting caused considerable dismay among consumer nations and hinted that Riyadh’s dominance of the cartel was in doubt.

The Vienna setback followed a February disclosure in U.S. documents released by WikiLeaks that Washington was concerned that the kingdom wasn’t able to pump enough oil to keep a lid on prices.

These have risen sharply since January when the Arab world was swept by unprecedented political upheaval and the loss of Libya’s output of 1.2 million barrels per day because of civil war there.

At OPEC’s ministerial meeting, Saudi Arabia, the world’s largest oil producer, pressed for the cartel to boost production by 1.5 million bpd to 30.3 million bpd to curb oil prices that threatened to undermine efforts to recover from the global financial meltdown.

Iran, the kingdom’s old rival, has long been hawkish about keeping prices high — especially now that its economy is being squeezed hard by U.N. sanctions imposed a year ago over Tehran’s contentious nuclear program.

“The acrimony that derailed … the meeting has wider implications than the short-term failure to agree a production rise wanted by Saudi Arabia but opposed by price hawks Iran and Venezuela,” Financial Times commodities specialist Javier Blas wrote.

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