Iran, boosting oil exports after the lifting of sanctions, is talking of a need to recoup its market share, making the OPEC member a challenge to any deal among producers to fix a supply glut, OPEC sources said on Thursday.
Russian officials have decided they should talk to Saudi Arabia and other OPEC countries about output cuts, the head of Russia’s pipeline monopoly said on Wednesday, hinting Moscow may be softening its steadfast refusal to cooperate over supplies.
The prospect of supply restraint by the Organization of the Petroleum Exporting Countries and rivals has boosted oil prices to almost $36 a barrel from a 12-year low close to $27 last week, despite widespread scepticism that a deal will happen.
Iran wants to recover its position as OPEC’s second-largest producer behind Saudi Arabia, which it lost in 2012 to Iraq when sanctions over its nuclear work forced Tehran to cut exports. Now, the recovery of market share is central, sources say.
“Because of the international sanctions, we lost 1.1 million barrels per day of our exports. So we have to go back to our share of the market,” a source familiar with Iranian thinking said on Thursday.
With sanctions lifted this month, Iran says it is increasing its oil output by 500,000 barrels per day (bpd) and boosting exports, a plan that other OPEC sources say makes any global cut agreement harder.
“Any deal is difficult to reach,” said a non-Iranian OPEC source, who added Iran would need to keep output flat or raise it by, say, 100,000 bpd “since higher prices would mean more revenue without the need to raise production. But I doubt it, really.”
OPEC officials are holding bilateral talks aimed at persuading Russia to participate in cuts alongside OPEC and for Iran to soften its position, industry sources say.