Iran oil minister Zanganeh to retire at end of Rouhani’s term

OPEC’s longest-serving oil minister, Iran’s Bijan Namdar Zanganeh, will retire at the end of President Hassan Rouhani’s term this year.

Iran's oil minister Bijan Namdar Zanganeh was at the centre of some of the most dramatic moments in OPEC’s recent history including in mid-2018, when he walked out of a meeting when he felt slighted by Khalid Al-Falih, the former oil minister of Iran’s arch-rival Saudi Arabia [File: Bloomberg]

Iran’s veteran oil minister, Bijan Namdar Zanganeh, will retire when President Hassan Rouhani’s term ends this year, closing a career that started with the birth of the Islamic Republic in 1979 and has often been defined by his country’s turbulent relationship with the U.S.

OPEC’s longest-serving oil minister said he won’t accept any proposal from Rouhani’s successor – who’ll be chosen during next month’s election – to continue in his post.

“If they offer me the presidency I won’t accept it, let alone the ministry,” the 68-year-old engineer told reporters in Tehran, according to state-run Shana news agency. “I won’t take another official post.”​

Rouhani will step down around two months after the June 18 presidential vote, having served two terms. The polls come as the Islamic Republic and world powers hold talks in Vienna to revive a 2015 nuclear accord and ease U.S. sanctions, which have battered the economy. State-controlled National Iranian Oil Co. has been priming crude fields and customer relationships so it can increase exports if a deal’s clinched.

End of an Era

“It is the end of an era,” Helima Croft, chief commodities strategist at RBC Capital Markets, said, referring to Zanganeh bowing out and the death last year of Iran’s OPEC envoy, Hossein Kazempour Ardebili.

Zanganeh is a “highly skilled” diplomat and technocrat who’s well-respected among his OPEC colleagues, she said.

His current stint as oil minister began in 2013 when Rouhani came to office. The administration set out to re-engage with the West and end international sanctions imposed under the presidency of hardliner Mahmoud Ahmadinejad.

Trump Shock

Under Rouhani, Zanganeh led an ambitious plan to attract foreign energy companies back to the country, which BP Plc estimates has the world’s fourth-highest oil reserves. Business delegates from across Europe and Asia traveled to Tehran for conferences hosted by the ministry. During OPEC meetings in Vienna, executives from the likes of Royal Dutch Shell Plc and Total SE would queue to discuss potential deals with Zanganeh.

Donald Trump’s election as U.S. president put an end to those efforts. Trump withdrew America from the landmark nuclear agreement in 2018 and effectively banned all purchases of Iranian crude. Foreign companies were forced to abandon projects and the country’s oil production roughly halved from almost 4 million barrels a day.

Zanganeh instead tried to develop Iran’s energy sector by transferring major contracts and projects to the private sector. On Monday, his ministry announced a $1.8 billion deal for local company Petropars Ltd. to develop a gas field that an Indian consortium was previously meant to invest in.

OPEC Drama

He was at the center of some of the most dramatic moments in OPEC’s recent history. In mid-2018, he walked out of a meeting when he felt slighted by Khalid Al-Falih, the former oil minister of Iran’s arch-rival Saudi Arabia.

Zanganeh also negotiated an exemption for Iran when the Organization of Petroleum Exporting Countries and its allies – a 23-nation grouping known as OPEC+ – began supply cuts in 2016. The minister argued that because the country was under sanctions, it shouldn’t have a production cap. The exemption still exists, sparing Iran from new OPEC+ quotas agreed last year as the coronavirus pandemic roiled oil markets.

A native of the predominately Kurdish province of Kermanshah, Zanganeh was a close ally of former Iranian Prime Minister Mir-Hossein Mousavi, a reformist figure who’s been under house arrest in Iran for almost a decade. Zanganeh often found himself the target of Iran’s hardliners, who mostly opposed the nuclear deal. They frequently tried to have him impeached.

(Updates from fifth paragraph with quote from analyst.)

Source: Bloomberg