The Organization of the Petroleum Exporting Countries (OPEC) has decided to leave production quotas unchanged and wait until March to reassess the market. Analysts are concerned with a possible Iranian cutoff in response should there be a decision to send the issue of the Islamic Republic's nuclear program to the U.N. Security Council for possible sanctions.
OPEC oil ministers decided Tuesday to keep the official quota of 28 million barrels per day. Oil analyst, Ehsan Ul-Haq, of PVM Oil Associates says OPEC will meet again in March to decide what to do if Iran cuts supply in protest against referral of its nuclear program to the U.N. Security Council.
"Iran exports more than 2.5 million barrels of oil per day, especially to Asia and Europe and if Iran either stops exporting its oil or restricts its exports to a few countries, then it will certainly have an impact," said Ul-Haq. "Because of Iran's good relations with China and Russia, it is a possibility that Iran might decide to send its oil only to Asian markets and it could mean lower supplies for Europe as a result and that other countries might have to make up for Iranian losses."
A special executive session of the International Atomic Energy Agency scheduled for Thursday is expected to send the Iranian nuclear program to the U.N. Security Council for possible sanctions.
The United States and other countries suspect Iran is working on a secret weapons program, something strongly denied by Tehran. Iran's oil minister, Kasem Wasiri, told reporters in Vienna his country would not retaliate by stopping exports in the event of Council referral.
Analysts say oil prices are high, at almost $70 per barrel, and any shortfall from Iran could lead to record highs of twice that figure.
Iran is the world's fourth-largest crude exporter and other countries have little spare capacity to make up for any loss. OPEC ministers meet again March 8 in Vienna.