Iran Warns Oil Will Slump to $40 If OPEC Fails to Cut Production - Bloomberg

Iran Warns Oil Will Slump to $40 If OPEC Fails to Cut Production - Bloomberg:

Oil prices will slump to $40 a barrel unless OPEC and its allies cut output significantly, and the group is unlikely to succeed in reviving the market, an Iranian official said.

Production will need to be reduced by at least 1.4 million barrels a day to prevent oversupply, Iranian OPEC Governor Hossein Kazempour Ardebili said in an interview. While the Islamic Republic itself won’t participate in any cuts while U.S. sanctions on its exports remain in place, Kazempour said the group may be unable to reach an agreement to curb supply when it meets in Vienna later this week.

The comments show the divisions within OPEC as it seeks consensus on next year’s supply policy, with crude having slumped into a bear market last month. While Saudi Arabian Crown Prince Mohammed bin Salman agreed with Russian President Vladimir Putin to continue managing the market, Qatar in a surprise move on Monday said it will exit the producers’ cartel in 2019, threatening its cohesion. OPEC decisions need to be unanimous to be implemented.