Dilara Irem Sancar | Anadolu | Getty Images
Iran’s oil minister on Wednesday criticized the effects of war-led disruptions to oil markets, weeks after Tehran’s 12-day hostilities with Israel sent crude price soaring.
In remarks via videoconference for the OPEC seminar in Vienna, Mohsen Paknejad said, “Whatever the cause, an aggression of war that leads to the disruption of the supply of oil and gas resources to the international market imposes … complications on energy producers, and subjects national economies to hardships.”
“I believe we all need to take a principled stand against the resort to, and use of war, as a tool of pursuing political objectives,” he said.
Iran is the third-largest producer in the influential OPEC alliance and holds the organization’s rotating one-year presidency in 2025.
The security of Tehran’s supplies — which averaged 3.3 million barrels per day in May, according to the June OPEC monthly oil market report that cites independent analyst sources — came under scrutiny last month, as Iran engaged in direct missile and drone strikes with long-time regional foe Israel.
Tensions further escalated when the U.S. attacked three Iranian nuclear facilities, Fordo, Natanz and Isfahan, in what U.S. President Donald Trump and Israeli Prime Minister Benjamin Netanyahu have repeatedly touted as a victory over Tehran.
Iran and Israel ultimately agreed to, and have been implementing, a Washington-brokered ceasefire since June 24, offering relief to oil prices that have since retreated amid concerns over long-term demand and output increases from some OPEC producers. The security of Iranian supplies remains a concern within the producer group’s considerations when deciding its output strategy, an OPEC+ delegate previously told CNBC.
Bob McNally, founder and president of Rapidan Energy Group, echoed that sentiment on Wednesday, telling CNBC’s Dan Murphy that “geopolitics is by far the biggest Black Swan,” or unpredictable factor, governing the market picture in the near-term, with Iran as an ongoing concern.
“We are not out of the woods with Iran,” he said with respect to lingering questions over the fate of Tehran’s nuclear program, which Israel and the U.S. have cited as the reason behind their recent offensive.
“What we believe in here is that the last 20 years of just sort of kicking the can down the road with Iran is likely to come to an end,” he added.
Trump, who also took a strict and sanctions-based approach to engaging Tehran during his first term, has made a priority of pursuing negotiations to achieve a so-far elusive nuclear deal with Iran during his second presidency. Late last month, Iran’s parliament approved a bill on suspending cooperation with the U.N.’s nuclear watchdog, the International Atomic Energy Agency.
“We are heading to where we’re going to have either a diplomatic deal, lifting of sanctions and a more benign scenario, or, I think we’re just setting up for the next round of conflict, especially if Iran attempts to go for a bomb or refuses to negotiate or even reconstitute its sort of shattered air defense system,” McNally noted.
Washington’s sanctions – bolstered by a fresh wave on July 3 – have crippled Iranian crude exports, the backbone of the Middle Eastern country’s economy. Most of Tehran’s barrels now head to China, often transported by Iran’s “shadow fleet” of off-grid oil tankers and intermediating shell companies.