Iran's OPEC Veteran Weathers Storms From Trump to Saudi Arabia

Iran's OPEC Veteran Weathers Storms From Trump to Saudi Arabia

By Golnar Motevalli, Grant Smith, and Will Kennedy

Iran’s Bijan Namdar Zanganeh is OPEC’s longest serving oil minister.

During 14 years spent shuttling between Tehran and the cartel’s Vienna headquarters, he’s proved himself adept at both the closed-door horsetrading, where policy gets decided, and the uniquely chaotic brand of public diplomacy ministers use to talk to the global oil market.

But he arrives for Monday’s meeting, his 48th, under pressure on several fronts.

Iran’s oil exports have plunged after President Donald Trump resurrected sanctions, crippling the economy and forcing Tehran into a dangerous cycle of brinkmanship with the U.S.

Meanwhile, the policy agenda of the Organization of Petroleum Exporting Countries is largely set by bitter rival Saudi Arabia, the only Middle East producer these days with real clout in the oil market. And Zanganeh is under attack at home from hardliners who see him as part of a reformist clique that botched rapprochement with the west.

None of that makes him irrelevant. In recent years, Zanganeh, 67, has proved able to make the best of a bad hand. His goal will be to show fellow ministers—not to mention a domestic audience anxious to see Iran assert itself internationally—that the country can’t be ignored.

He believes OPEC is being undermined as Saudi Arabia prioritizes its bilateral relationship with Russia, a country that’s not even an official member but the most important player in the broader OPEC+ alliance created in 2016.

"OPEC is is danger by the unilateralism of some members and the organization faces the risk of collapse," he told Iranian news wire Shana in May.

In recent weeks, he’s asserted himself over the seemingly trivial issue of when OPEC should meet. After ministers agreed a June date, Russia insisted the meeting be delayed until after this week’s G-20 summit in Japan. Iran complained, forcing weeks of back and forth before a new date was settled.

While he’s not always awkward—he had a good working relationship with former Saudi oil minister Ali Al-Naimi—Zanganeh has often been willing to go on the attack. As far back as 2000, during the first of his two stints in the job, Zanganeh refused to sign the final communique after Naimi consulted the U.S. Energy Secretary in the middle of the meeting.

New Sanctions

Those moments have come more often since Trump reimposed sanctions in 2018. Last June, Zanganeh stormed out of a meeting because he believed Saudi Arabia was using sanctions to steal Iran’s market share. Six months later he forced the meeting into a second day in a dispute over whether Iran should be exempt from cuts.

Zanganeh has been one of the Islamic Republic’s longstanding servants. He studied civil engineering at the University of Tehran, earning a master’s degree in 1977, a year before protest erupted against Shah Mohammad Reza Pahlavi’s corrupt regime.

Two years after the 1979 revolution, Zanganeh was made deputy minister for cultural affairs at the Ministry of Islamic Guidance. He oversaw reconstruction projects for several years during the Iran-Iraq War and became energy minister in 1988, the year the war ended.

He was made oil minister in 1997 by reformist president, Ali Mohammad Khatami. He held the post until Mahmoud Ahmadinejad was elected in 2005. In his first stint, he tried to attract foreign investment to Iran’s energy industry through so-called buy back deals where investors were repaid in crude. France’s Total SA and Norway’s Statoil ASA -- now called Equinor ASA -- committed to projects in the country.

After hardliner Ahmadinejad left office in 2013, Zanganeh was returned to his post by Hassan Rouhani. In the years he spent out of office, oil production plunged under sanctions imposed by the U.S. and European Union to stymie Iran’s nuclear research. Iran had fallen from being OPEC’s second-largest producer to sixth, severely weakening its power inside the cartel.

When those sanctions were lifted in 2015, exports started to recover and Zanganeh again sought to bring oil companies back. During OPEC meetings, executives would queue outside his Vienna hotel suite to discuss potential projects.

Everything went into reverse after the election of Trump in 2016. Even before sanctions were formally reimposed, investors got cold feet and western oil companies including Total and Royal Dutch Shell Plc stopped buying Iranian crude.

Under Pressure

At home, Zanganeh is under almost constant pressure from hardliners and right-wing lawmakers who’ve repeatedly tried to have him impeached and removed from office. But his record at OPEC and efforts to rehabilitate Iran’s energy sector mean he’s developed a reputation among the wider public for being an efficient and dedicated technocrat with few airs or graces—something of a rarity in the country’s leadership. 

“He is under siege at home, as are all the moderates,” said Helima Croft, chief commodities strategist at RBC Capital Markets in New York. “He has shown incredible staying power as his name is perennially floated for impeachment by his hardline critics at home.”

Zanganeh is still taken seriously in Vienna, where fellow ministers respect his reverence for OPEC’s traditional consensus and his seriousness of purpose.

As he arrived at the Kempinski hotel lobby last December, journalists scuffled with bodyguards as they tried to get their microphones and cameras close. Despite being jostled, Zanganeh remained calm and waited to deliver a simple message: Iran can’t participate in OPEC’s production cuts as long as it remains under U.S. sanctions and won’t allow other members to steal its rightful market share.

Photo: IRNA

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