Iran Supports Moves to Improve Oil Price: Zangeneh

Iran has not yet committed to freeze oil production to January levels to shore up prices.

“The whole point of the nuclear deal was to allow them to pump more oil”, Steven Kopits, managing director of the consulting firm Princeton Energy Advisors, said Tuesday, predicting the Iranians “will not go along”.

“Asking Iran to freeze its oil production level is illogical”, Iran’s OPEC envoy, Mehdi Asali, was quoted as saying by the Shargh newspaper.

The wild card is Iran, returning to the markets after years of sanctions, which has said it will resist any such curbs and stick to its pledge to increase production by 1 million barrels per day in the next 6-12 months.

But Tehran-based oil analyst Reza Zandi said it would be hard to persuade Tehran to agree to any restraints as there was a broad consensus among senior Iranian officials to increase production to pre-sanctions levels.

Iran just had its sanctions lifted and wants to win back the market share it lost to Saudi Arabia and other countries while under export sanctions.

A production cap is far from certain but you wouldn’t know from the way oil prices are surging.

“I share the consensus view that producers are unlikely to reach an agreement (on cuts), the rationale being the need to satisfy two conditions”, CMC Markets chief market analyst Ric Spooner said in Sydney.

Iran used to export 2.3 million barrels per day but its crude exports fell to 1 million in 2012.

Speaking to reporters after the meeting, Saudi Oil Minister Ali Naimi said producers would continue to assess the state of the market in the months ahead.

Many believe that the fact that major OPEC producers such as Saudi Arabia have refused to cut production would kill USA production by driving down prices and forcing some producers out of business.

For years now, Iran has had lower production levels because it was restrained by Global trading sanctions.

“This is the initial step and we have to look at it positively”.

A senior source familiar with Iran’s thinking was equally quick to shoot down the preconditions.

“There is already too much oil on the market”, Fathi said.

Iran will support any initiative to improve the situation with oil prices, Iranian Oil Minister Bijan Zanganeh said Wednesday after the talks with Venezuelan Minister of Petroleum and Mining Eulogio Del Pino, Iraqi Oil Minister Adel Abdel Mahdi and Qatar’s Energy Minister Mohammed bin Saleh al-Sada on freezing oil production.

Russian Federation has seen its recession-hit economy damaged by the slump, though even Saudi Arabia has announced a record budget deficit.