May 20, 2011, 10:27 AM EDT
By Caroline Alexander and Grant Smith
(Updates with council in second paragraph, analysts’ comments starting in fourth, OPEC role starting in sixth.
May 20 (Bloomberg) — The top Iranian legal authority said President Mahmoud Ahmadinejad’s assumption of control over the Oil Ministry this month violates the constitution, signaling a deepening rift in the hierarchy as Iran chairs OPEC.
The Guardian Council, partly appointed by Supreme Leader Ayatollah Ali Khamenei, said that it was “unlawful” for Ahmadinejad to have taken up the post, citing Article 135 of Iran’s constitution, state-run Fars news agency reported today.
Ahmadinejad declared himself caretaker of the Oil Ministry in a May 15 interview on state television, a day after dismissing Masoud Mir-Kazemi and two other ministers as part of a plan to combine several departments to improve efficiency.
The council’s comment “ties into a specific point of conflict,” Scott Lucas, an Iran expert at the University of Birmingham in the U.K., said in a phone interview. “It suggests the Guardian Council is pretty much on side with the supreme leader on setting the limits on what Ahmadinejad can do.”
Iran, the second-largest crude producer in the Organization of Petroleum Exporting Countries, took over the group’s one-year rotating presidency on Jan. 1. Traditionally, the OPEC president, who is the sitting oil minister of the country holding the presidency at the time, gives a public speech on behalf of the organization at the start of each ministerial conference.
It wasn’t clear whether the council’s interpretation of the law will have an impact on Ahmadinejad’s attendance at the June 8 meeting of the 12-member bloc in Vienna. Fars reported on May 18 that he would attend the gathering. Ministers will decide whether to raise output limits for the first time since 2008 at this year’s initial OPEC meeting.
Iran is often in favor of limiting oil output to keep prices high. Saudi Arabia, the group’s largest member, typically advocates levels that don’t damp economic growth.
The Iranian president returned to work May 2 after a week- long absence that followed a conflict between him and Khamenei over Ahmadinejad’s acceptance of Intelligence Minister Heidar Moslehi’s resignation.
Today’s comments by the council show “an increasingly open power struggle,” Samuel Ciszuk of IHS Global Insight said in a telephone interview in London. “He’s challenging his conservative opponents to pretty high degree, and the conservative faction is not backing down.”
Ahmadinejad was re-elected to a second term in June 2009 amid fraud allegations, which sparked the most widespread demonstrations in the country since the 1979 revolution that brought Shiite Muslim clerics to power. The leadership responded to the post-election dissent by authorizing the use of force, arresting thousands. Khamenei backed Ahmadinejad at the time, saying his victory was a “celebration” for the nation.
Article 135 of Iran’s constitution requires that ministers dismissed by the president remain in their position until a replacement is appointed, according to Fars. The president is allowed to select a temporary caretaker for departments without a minister, for a period of up to three months, it said. The council has yet to release its verdict on the matter.
Oil is Iran’s biggest source of foreign revenue, with the price of Iran Light crude gaining 22 percent so far this year to $108.65 a barrel. The ministry oversaw efforts to boost refinery processing to avoid shortages of gasoline following U.S. pressure to curb international sales of the motor fuel to Iran.
–Editors: Heather Langan, Philip Sanders
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