The logo of the Organization of the Petroleoum Exporting Countries (OPEC) is seen at OPEC's headquarters in Vienna, Austria June 19, 2018. REUTERS/Leonhard Foeger
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Iran may be Russia's ally in the Syrian conflict but when it comes to oil, Tehran's archenemy Saudi Arabia takes precedence – if last week's OPEC meeting in Vienna is anything to go by. Iran had been pushing hard for oil producers to hold output steady as U.S. sanctions are expected to hit its exports, meaning Tehran had little to gain from OPEC production increases that lower oil prices and cut its revenue.But Saudi Arabia and Russia had other ideas. According to three sources close to OPEC and Russia, the world's two biggest oil exporters agreed in May to work hand in glove to engineer a sizeable increase in oil output – albeit for different reasons.The events in Vienna were the latest example of how Russia and Saudi Arabia have effectively sidelined OPEC, driving policy for their own geopolitical ends and, in the case of Saudi Arabia, often at the behest of the United States.With their end game in mind, Russia first proposed that the combined output of OPEC countries and non-OPEC allies, such as itself, should jump 1.5 million barrels a day from July. Their tactic was for Saudi Arabia to then suggest a more modest rise of less than 1 million barrels in the hope it would be acceptable to Iran, the three sources told Reuters.
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