Iran, at 4.2 mmbbl/day is near a twenty year low.
They hate each other.
They hate for reasons ranging from the 12th Imam/Sunni-Shia thing to Great Satan relations to plain old orneriness.
From the Financial Times:
Opec’s price hawks press Saudis on output
A year ago, Opec delegates held what Ali Naimi, the veteran Saudi oil minister, described as “one of the worst meetings we have ever had”.
The signs are that the one scheduled to take place on Thursday could be almost as bad.
The June 2011 meeting ended in disarray with no formal agreement on output targets. That came after five member countries blocked a proposal by Saudi Arabia to offset the loss of Libyan oil by increasing production.
The contours of a similar clash are now emerging. A group of Gulf Arab states, led by Saudi Arabia, has proposed raising Opec’s production ceiling by 500,000 barrels a day. Other member states, particularly Iran, which is already accusing Saudi Arabia of producing too much oil, instead want Opec to adhere more rigorously to the existing target of 30m b/d.
“It could be quite a controversial meeting,” says Carsten Fritsch, oil analyst at Commerzbank. “There’s a risk it could end without agreement, just like the one a year ago.”
The concerns of price hawks such as Iran and Venezuela are not hard to understand. Thursday’s meeting occurs against the backdrop of the biggest monthly fall in oil prices in four years. Under normal circumstances, Opec ministers would have little hesitation in curbing production to push prices back up....MORE