Iran, Indonesia discuss oil markets

The financial value of the agreement has been estimated to be three billion dollars of which Iran’s share in the investment will mount to 30 percent as well as that Iranian technology and technical knowledge will be used in the construction of oil refineries. In July, OPEC produced about 33 million barrels per day, which is well above its target of 30 million bpd. OPEC in a September statement said its members would “welcome [Indonesia’s] return”. While OPEC allows associate membership, now its members are full members and Indonesia is expected to become a full member as well. Once it rejoins, Indonesia will regain its status as the only Asian member of OPEC and the only member that is a net importer of petroleum and other liquids. Indonesia originally joined OPEC in 1962 but suspended its membership at the beginning of 2009. Their rising domestic demand and falling production turned the country into a net oil importer.

Ghamsari further stressed Iran’s readiness to sell oil to all consumers in the world; “if Indonesia makes a formal request for purchasing Iran’s crude oil, we are ready to review their proposal”, he asserted.

Indonesia will be the fourth-smallest producer in OPEC just ahead of Libya, Ecuador and Qatar. Indonesia imports oil products, particularly gasoline, as a result of insufficient refining capacity to meet the growing demand for oil products.

OPEC in its latest monthly market report said member states were producing more oil even though an over-supplied market is keeping crude oil prices lower. Indonesia is planning a number of upgrades and expansions to existing refineries slated to become operational within the next decade. The oil ministry’s website, SHANA, was critical of OPEC members for not honoring a production ceiling.