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Last weeks OPEC meeting was characterized by a certain banality. The news that OPEC and non-OPEC members would agree to another nine months of production cuts elicited a collective shrug from oil markets and brought about a fall in prices. Little that occurred gave rise to alarm, and apart from news that U.S. shale producers were in dialogue with OPEC officials and that Saudi Arabia and Russia were conniving on deeper cuts in the backroom, reporters were somewhat at a loss for what would make for a juicy story.

Amidst the routine nature of the meeting, however, was a somewhat surprising announcement from Iran, OPECs third-largest producer, that it would not be cutting any output but would instead maintain its current level of 3.8 million bpd. Irans oil minister, Bijan Zanganeh, dodgedinitial questions regarding Irans compliance with OPECs agreement, but on May 25 stated categorically that Iran will not reduce its output.

There are indications that the country may be planning to ramp up production in order to fuel higher exports. In an interviewwith Argus Media, Zanganeh did not refute a claim from the National Iranian Oil Company (NIOC) that Iranian production would increase by 300,000 bpd by March 2018, though he did state Iran would respect the decision by OPEC.

He went on to state that by 2021 Iran would add 700,000 bpd to its overall capacity, with a targeted total capacity of 4.7 million bpd. He was hopeful that condensate production would increase from 600,000 bpd to 1 million bpd by March. The OPEC agreement was a short-term decision, and Iran was looking at the medium to long-term.

A major factor in Irans plans for increased output are contracts with foreign companies. The government of Hassan Rouhani has attempted to revamp Irans strict regulations for doing business with foreign companies. This process was stalled for months amidst resistance from Irans hard-liners, but Rouhanis re-election in May has spurred hopes that the countrys aging oil and gas infrastructure will soon enjoy major injections of foreign capital.

A deal with French oil giant Total is nearing completion, according to Zanganeh, which would see a more rapid development of the South Pars natural gas field, shared between Qatar and Iran. Total is musingan investment of $2.2 billion. Related:Saudis, Russia Will Do Whatever It Takes To Bring Oil To Balance

One Iranian official stated that deals worth $50 billion would be concluded in 2018, while Zanganeh mentioned forthcoming agreements with Lukoil, Maersk, Petronas and Petramina, though details of the deals are hard to come by.

A deal with China National Petroleum Corp (CNPC) will be concluded in July, according to Zanganeh, and will focus on the development of Irans Azadegan deposit.

In Vienna, the Iranian oil minister talked up Irans desire to reconnect with the world. Rouhanis re-election was a sign that Iran was ready and willing to engage with the international community, despite renewed hostility from the United States and considerable suspicions from the Gulf States regarding Irans regional ambitions.

Yet apart from the hype stirred up by Irans oil administration, little concrete information regarding Irans new oil and gas deals has emerged. The much-anticipated flood of investment has yet to materialize. Rouhanis first election, and the deal signed in July 2015 over the countrys nuclear program, was meant to auger an end to Irans isolation. Rouhani was able to win re-election in May despite considerable disappointment over Irans stagnant economy, which he had vowed to reinvigorate in part through deals with foreign companies.

While it is certain that Rouhani will be more amenable to new oil deals than his challenger, hardliner Ebrahim Raisi, whether he is able to translate his electoral win into new investment for Irans oil and gas industry remains to be seen.

Zanganehs comments in Vienna mirror the declarations made by an NIOC official after the July 2015 agreement and contain much of the same sentiment: confidence, optimism that Irans dreams for higher production and exports will be realized, and a certain amount of hype. Thats nothing new for OPECs third-largest oil producer, which has vowed that it will respect the OPEC production deal even as it plans for the future; whether the money needed to realize that future appears is another question entirely.

By Gregory Brew for Oilprice.com

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Should Markets Fear Iran's Plans To Boost Oil Output? - OilPrice.com

Secretary of Defense James Mattis said in an interview with "Face the Nation" Saturday that Iran is at the center of dysfunction in the Middle East and remains a threat around the world, echoing President Trump's tough talk on the country.

"Face the Nation" host John Dickerson asked the retired Marine Corp general, a veteran of the wars in Iraq and Afghanistan, if he still stands by comments he made in 2011, when he ranked Iran as his top priority while he was the head of U.S. Central Command under President Barack Obama.

"I had a more -- let's just say, a narrower portfolio in those days," Mattis said. "And in the U.S. Central Region, what we find is wherever there are challenges, wherever there is chaos, wherever there is violence, whether it be in Lebanon, in Syria, in Iraq, in Yemen, the attempts to unsettle Bahrain. We always find Iran and the IRGC [Islamic Revolutionary Guard Corps] at it."

"It's not the Iranian people," Mattis added. "We are convinced it's a regime that is conducting itself in order to stay in power in Tehran as a revolutionary regime, not as a proper nation-state. They are not looking out for the best interests of their own people."

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On the topic of Iran's overall international threat, Mattis resurrected the story of an assassination attempt in 2011 in Washington of Saudi Arabian diplomat Adel al-Jubier by an Iranian American with close links to the Quds Force, an Iranian paramilitary organization known for its ties to terrorism.

"You have got this revolutionary cause that causes them to then go around creating mischief everywhere, to include trying to murder an Arab ambassador fewer than two miles from the White House a couple years ago," Mattis said.

He continued: "And I've seen the intelligence. This was not a rogue agent. This was an operation approved at the highest levels. And so, you know, ambassadors are men and women of peace. And for someone to try to murder an ambassador in Washington D.C., you can understand why President Obama was committed to stopping the nuclear program."

Mattis' revisiting of old hostilities between the U.S., Saudi Arabia and Iran follows a historic $110-billion arms deal. President Trump and Saudi officials signed the deal this month during Mr. Trump's visit to the country's capital, Riyadh -- the first stop of Mr. Trump's first trip abroad as president.

In a largely scripted speech before prominent Muslim leaders, Mr. Trump used his position to mend sectarian differences and lambaste Iran, tying the country directly to terror groups as well as addressing its government's failures.

"The Iranian regime's longest-suffering victims are its own people," Mr. Trump said. "Until the Iranian regime is willing to be a partner for peace, all nations of conscience must work together to isolate Iran, deny it funding for terrorism."

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The Jerusalem Post

Report: After Iranian elections, Tehran-Hamas ties warming up The Jerusalem Post Iran has allegedly decided to resume financial backing for Hamas, Palestinian sources said on Tuesday. The move came after representatives from the Islamic Republic and the Palestinian terror group conducted intensive discussions in Lebanon over the ... Iran to Relaunch Hamas Financial AidThe Jewish Press - JewishPress.com Iran agrees to renew funding to Hamas -- reportThe Times of Israel Iran to Resume Financial Support to Hamas, Report SaysHaaretz Arutz Sheva -JerusalemOnline -i24NEWS (press release) (registration) all 11 news articles »

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Report: After Iranian elections, Tehran-Hamas ties warming up - The Jerusalem Post

BEIRUT In the week before the May 19 presidential election in Iran, the eventual victor, Hassan Rouhani, criticised the judiciary and the powerful Revolutionary Guards with rhetoric rarely heard in public in the Islamic republic.

Now, in the eyes of his supporters, it is time to deliver. Millions of Rouhani's followers expect him to keep pushing on human rights issues.

"The majority of Iranians have made it clear that they want improvement on human rights," said Hadi Ghaemi, the director of the Center for Human Rights in Iran (CHRI), a New York-based advocacy group. "Expectations are running high."

That message came through loud and clear shortly before Rouhani, who won re-election with more than 57 percent of the vote, took the stage at a gathering of supporters in Tehran last week.

"Ya Hussein, Mirhossein" went the thunderous chant, a reference to Mirhossein Mousavi, a presidential candidate in the 2009 election, who, along with fellow candidate Mehdi Karroubi disputed the results, spurring widespread protests.

Dozens of protestors were killed and hundreds arrested in the crackdown that followed, according to human rights groups.

Mousavi, his wife Zahra, and Karroubi, were placed under house arrest in 2011 after calling for protests in Iran in solidarity with pro-democracy uprisings across the Middle East.

The trio's continued detention is a divisive political issue in Iran and one that Rouhani has promised to resolve.

But if he keeps pushing, he will face a backlash from his hardline opponents which could undermine his second term, analysts say.

CLEAR MESSAGE

At the rally, it took several minutes for the announcer to quiet the crowd before another chant broke out: "Our message is clear, house arrest must be broken".

Along with those arrests, more than 20 journalists and activists were arrested in the lead-up to the elections according to CHRI, an issue which has also been raised by Rouhani supporters.

Many political prisoners are kept in solitary confinement and not allowed to see their families for long periods of time, according to human rights groups.

Iran has one of world's highest rates of capital punishment. At least 530 people were executed in 2016, according to a United Nations report.

Rouhani's supporters also expect him to fight for basic rights that affect their daily lives, like preventing security forces from harassing women for the way they dress or the judiciary from cancelling concerts.

During his first term, Rouhani made the signing of an agreement with Western powers, which lifted a large number of sanctions in exchange for curbs on Iran's nuclear program, his top priority.

As a result, human rights issues were sidelined, analysts say. But now that the nuclear agreement is being implemented, his supporters are waiting for change.

Rouhani's decisive election win may have finally given him the opportunity to address human rights issues.

"As the head of the executive branch, Mr. Rouhani and his colleagues must use this opportunity to the maximum," parliamentarian Gholamreza Tajgardoon said last week, according to the Iranian Labour News Agency (ILNA).

But signs are emerging that hardliners are ready for a fight.

Iran's judiciary chief hit back at Rouhani on Monday for bringing up the issue of the house arrest of opposition leaders during his campaign.

"Who are you to break the house arrests?" Larijani said without naming Rouhani, according to the judiciary news site Mizan.

Larijani said the Supreme National Security Council must take the initial decision to end the house arrests and then the judiciary would step in.

Any attempt to resolve this issue outside this legal procedure would be seen as an attempt to stoke up unrest similar to 2009, he said, according to Mizan.

"We're issuing a warning that they should wrap this issue up otherwise the judiciary, with authority, will wrap this issue up itself," Larijani said.

Meanwhile, the restrictions continue.

Karroubi, 79, served as speaker of parliament before running for president in 2005 and 2009. He now stays largely on the upper floor of his house in Tehran and gets exercise by walking indoors, according to his son Mohammad Taghi. His only sources of information are local newspapers and state TV.

Security agents stay on the premises around the clock and do not allow him to have access to the phone or Internet.

Taghi, speaking by telephone, said the hosue arrest had

backfired, raising the profile and importance of his father and the other detainees.

"If the goal is to cut off their political ties, what we've seen is that the passage of these six or seven years hasn't had any effect," he said. "In fact, the limitations and problems have increased their impact in society."

Little progress can be made on any human rights issue without the approval of Supreme Leader Ayatollah Ali Khamenei, the highest power in the country.

"Since becoming Supreme Leader in 1989, Khamenei has sought to weaken every Iranian president in their second term," said Karim Sadjadpour, a senior fellow at the Carnegie Endowment.

"Given how directly Rouhani challenged Khamenei during the campaign this tradition is likely to continue."

(Reporting By Babak Dehghanpisheh; Editing by Angus MacSwan)

BERLIN German Chancellor Angela Merkel underlined her doubts about the reliability of the United States as an ally on Monday but said she was a "convinced trans-Atlanticist", fine-tuning her message after surprising Washington with her frankness a day earlier.

WASHINGTON The Trump administration is nearing completion of a policy review to determine how far it goes in rolling back former President Barack Obamas engagement with Cuba and could make an announcement next month, according to current and former U.S. officials and people familiar with the discussions.

BAGHDAD Two car bombs killed at least 20 people in Baghdad and wounded about 80 others early on Tuesday, security sources said, one targeting the late-night crowds typical of the Muslim holy month of Ramadan who shop and eat ahead of the next day's fast.

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The final result in Irans election was more clear-cut than President Hassan Rouhanis supporters had dared to hope: the incumbent received 23.5 million votes (around 57 percent of the 41+ million votes cast), enough to secure outright victory in the first round. His win allows him to continue the policy of rapprochement that he has pursued since assuming office in 2013, with the 2015 nuclear agreement his biggest success to date. Given the uncertainty emanating from the new US administration, the European Union now has a key part to play. By taking a determined approach on foreign policy, the EU could unshackle itself from the US on a matter of global political importance.

The short but intense election campaign in Iran has shown that lively political debate is possible in the Islamic republic, despite tight controls on the media. Conservatives and moderates went on the offensive, with the former accusing the government of incompetence while the latter denounced the hardliners for wanting to bring back the bad old days of deprivation and no freedom. The Guardian Council, controlled by Supreme Leader Ali Khamenei, only permitted six (male) candidates to stand out of over 1,600 applicants (including both men and women).

In an emphatic endorsement of the moderate course he has taken, President Rouhani received almost five million more votes than in the 2013 election

Both sides withdrew one of their candidates shortly before voters went to the polls, meaning that from the first round the election was a contest between two clerics: the incumbent Rouhani and his opponent Ebrahim Raisi, the arch-conservative grand imam of the Imam Reza shrine in Mashhad (Irans second-largest city and an important religious centre). The former attorney general, who was virtually unknown a year ago, is regarded as a confidant of Khamenei and possible successor.

With a high turnout of 73 percent, the result is also a victory for the system. In an emphatic endorsement of the moderate course he has taken, President Rouhani received almost five million more votes than in the 2013 election; however, in his second term he will still be able to act only within the limits laid down by the Supreme Leader and the unelected institutions that support him.

For Europe and the international community, the result represents continuity in terms of foreign policy, as the election was a de facto referendum on whether Iran would stick to its nuclear deal (Joint Comprehensive Plan of Action, JCPOA). This was reflected in the words of the EUs High Representative of the Union for Foreign Affairs and Security Policy, Federica Mogherini, who took to Twitter shortly after the result was officially announced to congratulate Rouhani on his "strong mandate". She summarised Europes priorities in under 160 characters: "#EU ready to continue work for full JCPOA implementation, bilat engagement, regional peace, and meet expectations of all people in #Iran"

Since Washington is unlikely to make concessions on sanctions, the EU must take the initiative

She was addressing the main criticism levelled by the presidents opponents, who claim his deal has not brought a promised economic recovery. Although the Iranian economy has grown by almost five percent in the past year and Rouhanis government has managed to bring down inflation from over 40 percent to less than 10, the upswing has not been felt by ordinary Iranians.

Since Washington is unlikely to make concessions on sanctions, the EU must take the initiative, for example by providing financing and payment channels or exercising due diligence to verify that Iranian business partners are not affected by existing sanctions.

Mogherinis second point greater engagement between Europe and Iran is in line with the principle of broad-based, bilateral cooperation with third-party states that is at the heart of European foreign policy. It represents a determination to move beyond a narrow focus on the nuclear question, which dominated the 12 years of negotiations that led up to the signing of the JCPOA.

On both these points, there are frictions with Washington. Both the Trump administration and Congress believe trade with Iran is tantamount to strengthening the Iranian regime. The US is therefore willing to cooperate further with Iran on a very limited set of issues, such as in the fight against so-called "Islamic State" (IS) in Iraq. Members of Congress from either party want to force Iran to its knees with new sanctions over its missile programme and its activities in Syria and Yemen.

Expanding bilateral relations in the face of US resistance will demand courage and farsightedness from the EU.

This is the issue addressed by the third and most ambitious point in Mogherinis tweet: bringing peace to the region. Israel and the neighbouring Persian Gulf states see Teherans support for Shiite militias in Lebanon, Syria, Iraq and Yemen as a threat. They believe the problem with the JCPOA lies not in temporary restrictions on the Iranian nuclear programme (indeed, they support this restriction) but in the elevation of Teherans status in the regions politics following successful negotiations with the Obama administration. From the Arab and Israeli perspective, Donald Trumps visits to Riyadh and Jerusalem (the first calling points on his maiden foreign tour) represented an important, and not merely symbolic, return to old lines of conflict.

This marks a formidable foreign policy challenge for the EU and its member states. Although Rouhanis re-election means rapprochement between Europe and Iran will continue (provided Iran continues to uphold its JCPOA obligations), tensions with the US are likely to increase. Although the US itself is unlikely to pull out of the actual agreement, it is deliberately endangering the deal with its provocative rhetoric and harsh anti-nuclear measures. The Iranian institutions surrounding the Supreme Leader are likewise opposed to the deal, making an uncontrolled escalation likely.

Expanding bilateral relations in the face of US resistance will demand courage and farsightedness from the EU. Europe demonstrated both these qualities when it began nuclear talks with Iran in 2003. If the EU and its member states build on their diplomatic successes, they could make crucial progress towards another goal: unshackling themselves from the USA on a key security policy issue and showing themselves capable of acting autonomously on the global political stage.

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