Iran Opens Diplomatic Offensive to Lower Global Oil Production

With oil production continuing at mostly normal rates despite the dramatic fall in prices to $49, Iran has launched a diplomatic front aimed at persuading other OPEC states to reduce their own production of hydrocarbons. The effort, which includes support from Iran’s Supreme Leader, Ayatollah Ali Khamenei, has thus far fallen upon deaf ears. The other members of OPEC are mostly Arab states at odds with Iran, and are expected to refrain from any type of action that would suggest their acquiescing to an Iran-led plan.

Iran’s economy has seen itself even further restricted as a result of falling oil prices, due largely to Iran’s dependence on hydrocarbons to support an economy that is severely weakened by sanctions. Iran’s inability to develop areas outside of its hydrocarbons sector have contributed, at least in part, in bringing Tehran to the negotiating table over its nuclear program. The risks posed by falling oil prices have evidently been taken seriously by Iranian leadership, as the initiative to persuade OPEC states into curbing production has been highly publicized in Iran as an effort to “neutralize” current “problems” in oil pricing.

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News Briefs:

  • Individuals labeled as “mobsters” by Chinese authorities were gunned down by police before they set off an explosive device in a busy business corridor of China’s restive Xinjiang province. The attack was quickly attributed to Uyghur “extremist” groups present in the region, saying that the police were able to thwart the attack due to information provided by a local informant. The police arrived at the scene before, the report details, a man wielding an axe approached and tried to strike them, obligating the police to shoot him as well as those associated with him. Dilxat Raxit, a spokesman for the World Uyghur Congress, condemned the attacks as “an excessive use of force.”
  • An initiative led by Australian mining conglomerate Aspire Mining and multinational investment firm Noble Group announced that tests conducted at their Nuurstei Coking Coal Project have revealed that coking coal is present at the site. The test consisted of drilling a hole through an area thought to be rich in coal, the results of which revealed that the coking coal present is of a premium quality. Additional tests will be needed to verify the coal’s quality.
  • Turkmenistan could increase natural gas production by nearly 9% in 2015, a new report reveals. While still two percent less than the 11% increase experienced in 2014, the Turkmen government could see exports rise to the level of 83.8 billion cubic meters (BCM) during the coming year. The Turkmen government’s growing ties with China account for a significant portion of the projected increase in exports.
  • The cost of insuring Russian debt against default rose again as a result of continued lost petroleum revenue, and ratings giant Fitch lowered Russia’s credit score to just a notch above junk. The Russian ruble continued its free fall, sinking an additional 2.3%, and oil prices continued to have adverse effect on the Russian economy. The main source of economic pain for Russia continues to be the falling price of oil; this is due, at least in part, to Russia’ status as the world’s largest exporter of energy.
  • The Tajik government moved to proscribe the Islamic group Salafia yesterday. The Tajik government has labeled the group as an “extremist, fundamentalist Islamic movement,” and has made any type of affiliation with the group subject to penal sanction.  The Tajik Supreme Court ruled to ban any “delivery or distribution” of the group’s materials and blocked the group’s website within Tajikistan. Salafia joins a group of more than 20 already banned Islamic groups, including al-Qaeda and the Taliban.
  • Armenian officials in Yerevan announced the deaths of two of its military members as the result of a clash between Armenian and Azerbaijani forces. The Armenian spokesman alleged that the skirmish took place as Azerbaijani forces “attempted to sneak into Armenia.” The Azerbaijani Defense Ministry denied that the incident took place.
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