02/06/2016 World Business Report

Spoiling the party in Vienna - Iran's oil minister says he won't

back any deal to limit oil production which would boost

Question is, why should we even care anymore about OPEC?

Plus - strikes, price wars and security fears.

Worrying times for the global airlines - but the boss

of Lufthansa tells us passengers have never had it so good.

Stop what you are doing and give me eight minutes and I will give you a

snapshot of everything in the world of business and money. Let's get

cracking. We start with the price of oil,

because in the next few hours, the OPEC group

of oil-producing nations will be starting their twice yearly meeting

in the Austrian capital, Vienna. They have repeatedly failed to agree

a deal to restrict crude supplies and prop up the slumping price

of oil. Many are now questioning

whether the group still has any This is Bijan Zanganeh, the oil

minister of Iran, getting mobbed by Iran was of course under Western

sanctions for years. It was blocked from basically

selling it all. -- its oil. Now they've been lifted,

it's determined to make the most Last night he told reporters,

"An output ceiling has no benefit Let's just give you a bit

of context to all this. Brent crude is now trading

around this level - $49 a barrel. In January, it hit this -

a low of around $27 a barrel. So it's up almost 80% since then,

relieving some of the massive Some of those nations will used to

getting $120 a battle for oil. But don't forget, two years ago

it was around $115 a barrel. So even after the recovery,

it is still down by more than half. And analysts are saying the recent

recovery is based on temporary We have seen the Canadian wildfire

which not one million barrels a day of flying, and there we have seen

Nigerian production get knocked off by a series of sabotage, which is

not of about 600,000 barrels a day. I have not got a significant amount

of crude oil, which is helped to push out oil prices slightly -- it

not off. Richard Mallinson is a

geopolitical analyst Thank you for coming in at this time

of day. Let's start with Iran. It seems to be one of the big problems.

They have not been able to sell oil for many years now and now they are

allowed to sell. There will not come to the table and sell we will only

sell a little. Iran wants a higher or price as well. It benefits it as

much as Saudi Arabia and the other OPEC members. But it is saying we

lost market share because of sanctions. They have been lifted and

we want that market share back. And that market share, when Iran was

blocked from the markets, it was sucked up by the Saudis. Some of it.

Some went to Iraq and son went to shell produces in America. It is not

automatically clear who Iran takes from, or can there be enough demand

and growth, can we lose and supply elsewhere, to allow Iran to come

back in. Iran is already exporting a lot more than was last year, and the

market is managing to absorb that. Prices are still going up. At the

end of today, as consumers we like low prices, and producers don't, but

can this be solved is Saudi Arabia said OK, we will turn some of the

taps off, for a while, and the price will go up. The Saudis have been

resisting this ever since we saw the price of oil go down. Any decision

in November 2014 where OPEC did not agree a cut was led by Saudi Arabia.

It was a deliberate strategy to let the price go though. Let it have any

impact on production elsewhere, and then eventually the market will

rebalance. A lot of that comes back to in the 1980s when they tried to

prop up the price, and it meant production fell by nearly two thirds

and the price still collapsed. They did not want to go that way again.

They are looking for the payoff in terms of higher prices. I have seen

in the headlines and many people are asking, should we care about OPEC

any more? They failed in the last two meetings to come to an

agreement. Now you have fracking in America, ran in the picture. Do we

need OPEC? -- run. We should still care. It still matters for the oil

market and for prices, and the fact that the Saudis are talking to other

OPEC members show they still care. We appreciate your time. Thank you

for joining us. We are also talking airlines this

Thursday. All the top bosses are in Dublin

for the annual meeting of their trade body IATA - the International

Air Transport Association. We've been talking to Carsten Spohr,

the boss of Europe's biggest He says passengers have never had it

so good, with air fares seeing some of the steepest price falls

of any product. But it's also been

a tough environment for the carriers themselves, with major

cost cuts and increased concerns over safety, as he explained to

our reporter Theo Leggett. Huge cost pressure has been in this

industry for years. Obviously we cannot depend on the oil prices

remaining where they have been lately. So I think that does not

relieve us from continuously working on efficiency and cost reduction. We

have been passing that on to the passengers historically. Only a few

products have gone down in price as much as a traffic. Therefore I think

the consumer is taking the benefit and flying more often, which is

creating this extraordinary growth for our industry compared to

others. You mentioned efficiencies and cost-cutting, but that has got

you into trouble as well with your relationship with the unions. They

have been a lot of strikes. Of course. Changing structures in

general does create internal resistance, but in the end, we have

a joint goal with our staff and shareholders, with our customers, to

be able to grow and maintain our number one position, and the pain it

takes will be accepted. Will you have more strikes? How our talks

progressing? We have a constructive dialogue with our unions. We have a

joint goal. After years of shirking our core fleet, we want to be able

to grow that fleet, and that is what is guiding us in the current

constructive dialogues -- shrinking. The cargo market is the

most volatile of all businesses in aviation. It is more important for

Lufthansa than other carriers, it was of huge export volumes out of

Germany, which is made as one of the biggest cargo carriers in the world.

Even in a down cycle we can show profits. We are optimistic about

cargo, although not as much as his ago. I have to ask about safety. --

years ago. They have been a lot of high-profile accidents recently. Do

you think everything has been done that can be done to guarantee the

safety of passengers? First, it is important to stay flying. This

remains the safest way of transport. It has been and with all of the

ongoing efforts to increase safety even further, it will be in future.

Even though we have unfortunate accidents, incident, in the last

month, historically, flying is as safe as never before. I have not

visited one meeting at this conference where we don't touch on

safety. It is the number one, surely for Lufthansa, and the whole

industry. We will have more on that throughout the next day or so.

Let's go to Asia now, where the US Treasury Secretary is in

Let's ask Rico Hizon, who's following the story in Singapore.

Hello! He will be meeting with the South Korean finance minister, and

for sure, the foreign exchange will be high on the agenda. The US has

accused several Asian countries of manipulating the value of their

currencies, it including the likes of China, Japan and South Korea. The

weakness of the South Korean money against the US dollar is likely to

be a key discussion between the two sides. Also making business

headlines today, the slight pickup in the domestic economy and South

Korea. Consumption and production where the key drivers that led the

economy to grow in the first quarter I a shade more than initially

revealed. It expanded by Sir .5% in the first two months of this year.

2.8% year on year. While that might be some good news, data since the

end of March has been mixed. Data released yesterday was on this

side. Production in April fell to a ten month low. So they are all

making headlines today in South Korea. Thank you. Cheers.

The taxi app Uber has won a $3.5 billion investment from Saudi

I will have more on that later on. Follow me on Twitter. I will be back

to take a look at the newspapers.