(Updates with analyst comment in fourth paragraph.)
May 18 (Bloomberg) -- Iran’s President Mahmoud Ahmadinejad, who has taken over the country’s Oil Ministry, will attend next month’s OPEC meeting, raising concern that he may use the gathering to criticize western governments.
“Whoever is responsible for the Oil Ministry also participates in OPEC meetings,” Mohammad Reza Mir-Tajeddini, Iran’s vice-president for parliamentary affairs, told state-run Fars news agency today. “If OPEC meetings take place during his time as a caretaker, he will attend himself.”
Iran, which is under four sets of United Nations sanctions over its nuclear program, is often in favor of limiting output to maintain high prices. Saudi Arabia, the group’s largest member typically advocates levels that don’t damp economic growth. The International Energy Agency last week trimmed its 2011 oil demand forecast as rallying prices begin to weigh on consumers. Ahmadinejad has described the Holocaust as a fabrication and said Israel should be wiped off the map.
“His presence will raise some fears that he wants to use the OPEC platform for anti-Western rhetoric and talk up the price,” said Samuel Ciszuk, a Middle East energy analyst at IHS Global Insight in London. “It’s not only the U.S. that will fear this. Saudi Arabia won’t take kindly to someone trying to bring militancy to the meeting, especially at a time of fragile economic recovery.”
The Organization of Petroleum Exporting Countries’ 12 nations will hold their first meeting of the year on June 8 in Vienna to decide whether to raise output limits for the first time since 2008. Since the group last convened on Dec. 11, an armed rebellion has broken out in Libya amid a wave of unrest that ousted longtime rulers in Tunisia and Egypt and is sweeping across the Middle East, home to more than half of the world’s crude reserves.
Oil prices have surged after fighting halted exports from Libya. Brent crude futures rose above $127 a barrel on April 11, the highest since July 2008. Demand will decline in the U.S., the world’s biggest oil consumer, as customers face $4 a gallon at the pumps, the IEA said.
Iran, OPEC’s second-largest crude producer and holder of the group’s presidency this year, since 2003 has been at odds with the U.S. and its allies over the aims of its nuclear program, which the West suspects is intended to produce atomic weapons. Iran says the program is for peaceful purposes and has refused to abandon it.
Ahmadinejad declared himself caretaker of the Oil Ministry in a May 15 interview on state television, a day after dismissing Masoud Mir-Kazemi and two other ministers as part of a plan to combine several departments. The government had been required to reduce the number of ministries to 17 from 21 by 2015, as part of a plan to improve efficiency.
Earlier this month, Iran’s parliament approved a budget of 5,083 trillion rials ($480 billion) based on an oil price of $81.50 a barrel. The budget for this calendar year, which started March 21, is about 40 percent more than last year.
Oil is Iran’s biggest source of foreign revenue, with the price of Iran Light crude for sale to Asia gaining 22 percent so far this year to $108.63 a barrel. The ministry oversaw efforts to boost refinery processing to avoid shortages of gasoline following U.S. pressure to curb international sales of the motor fuel to the Gulf state.
“The place of the oil industry in our national economy is so important that I decided to take on the responsibility to oversee the ministry myself,” Ahmadinejad was cited as saying in a May 16 meeting with oil directors, according to a report in Arman newspaper.
U.S. and European diplomats walked out of the UN General Assembly hall last September after Ahmadinejad said that the Sept. 11 terrorist attacks may have been orchestrated to bolster the U.S. economy and “save the Zionist regime.”
--With assistance from Grant Smith in London. Editors: Raj Rajendran, John Buckley.
To contact the reporters on this story: Ladane Nasseri in Tehran at firstname.lastname@example.org; Ayesha Daya in Dubai at email@example.com.
To contact the editor responsible for this story: Stephen Voss at firstname.lastname@example.org
© Copyright 2016 Bloomberg News. All rights reserved.