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Iraq rejects a Saudi proposal to create a "new OPEC"

A US newspaper revealed an Iraqi rejection of a Saudi proposal to establish a new organization to manage oil.

The newspaper "The Wall Street Journal", that Russia and Iraq rejected a proposal to establish a new OPEC alternative oil.
According to the report issued on Tuesday evening, the proposal of the new Petroleum Organization submitted by Riyadh to Russian Energy Minister Alexander Novak in December, but was rejected.

"Such a decision is beyond his powers and he will turn it into the Russian foreign minister and the Kremlin presidency office," Novak said. The proposal calls for transforming the current "loose cooperation" between OPEC and Russia into a "oil union" between two blocs, one led by Russia and the other by OPEC, which is dominated by Riyadh.
According to RT television reported on December 29, Russian Minister Novak said about the Saudi proposal "there will be no new oil organization," adding that it would risk creating more monopoly and bureaucracy and making decisions.

Riyadh, which has been criticized by US President Donald Trump over the past year for rising oil prices, is seeking to protect Russia from American anger and blame Moscow for rising .

prices.In contrast, Moscow is aware that the Saudi decision will remain close to Washington, They will not win Riyadh, but they want In its exploitation of Russia's energy strategy by dominating the decision and directions of OPEC, without any legal obligations on its part, because Moscow avoids engaging in a conflict with the United States.
This "proposed union" or so-called "new OPEC" will be built from two groups, the OPEC member group, and the group of Russian-led countries that include former oil-exporting states of the former Soviet republics and other countries under Moscow's cloak.

Namely the 10 countries that cooperated with the Petroleum Organization in reducing production and allowing prices to rise after the painful collapse cycle.
According to Wall Street, Iran and other members of the group also rejected the proposal because of concerns over Moscow's and Riyadh's dominance of oil policy.

The proposed oil union seeks to restore Riyadh's ability to steer oil prices amid rising US rock oil production, which in recent years has become a "weighted product" that sets oil market trends and prices.

And the role of "weighted product", previously played by Riyadh and setting the price target for a barrel of oil.
This new proposal is a relaxation of an earlier plan put forward by Saudi Arabia and the United Arab Emirates to create a "completely new oil organization", of which Russia becomes a member, which has been floated by the Saudi government.

In June, Saudi Crown Prince Mohammed bin Salman, through Oil Minister Khalid al-Faleh, proposed a plan to create a completely new oil organization with new members.
According to the "Wall Street Journal" of OPEC officials. However, the proposal put forward in Vienna raised the concern of some Member States, particularly Iran, Iraq, Nigeria, Angola and Algeria. The former Iraqi oil minister Thamer Ghadhban has openly criticized the plan, where he said al-Faleh at a meeting in Vienna that "OPEC was established in Baghdad"

Riyadh, which faces a range of oil crises and still relies more than 80 percent on oil in budget revenues, seeks to raise oil prices and fight rock oil without bringing American anger to it. The only way is to try to persuade Moscow to play this role. The danger.

But Moscow, which has already suffered from dumping Saudi Arabia into oil markets and putting it in a political crisis that ended with the disintegration of the Soviet Union, is not prepared to play this role. According to the report, Riyadh will go to put the plan again at the meeting in Vienna on February 18.
Riyadh has put its budget at $ 84 a barrel at a time when prices are around $ 60 a barrel. Riyadh, which accounts for more than 80 percent of its income, suffers from a huge deficit that will have to be heavily leveraged this year amid harsh conditions and conditions that will not be comfortable for it and its major companies such as Aramco and its sisters.

Oil fell 1 percent on Wednesday after the US crude inventories report showed signs of concern over the impact of US sanctions on Venezuela on global supply. Concerns about weak global economic growth and the China-US trade dispute continue to weigh on the morale of major oil traders.
Oil fell on Tuesday after a survey showed business growth in the euro area almost stopped in January. London Brent crude fell 62 cents to $ 61.36 a barrel, after rising 15 percent in January. US crude fell 48 cents to $ 53.18.

Article Credit: https://sumer.news/ar/news/
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