Iran To Resist Curbs On Oil Output Today

Iran said on Wednesday it would resist any plan to restrain its oil output as fellow OPEC ministers tried to persuade the country to join the first global oil pact in 15 years.

Talks in Tehran between Iranian oil minister Bijan Zanganeh and his counterparts from Iraq, Qatar and Venezuela began on Wednesday. Iran is the major obstacle to the first joint OPEC and non-OPEC deal since 2001, having pledged to increase output sharply to regain market share lost during years of sanctions.

The meeting in the Iranian capital followed a deal reached on Tuesday by OPEC power Saudi Arabia and non-OPEC Russia, the world’s top two producers and exporters, to freeze production at January levels if other big oil nations agree to join.

OPEC Gulf producers – Qatar, Kuwait and the UAE – as well as Venezuela said they would join the pact, aimed at tackling a growing oversupply and helping prices recover from their lowest in over a decade.

“Asking Iran to freeze its oil production level is illogical … when Iran was under sanctions, some countries raised their output and they caused the drop in oil prices.” Iran’s OPEC envoy, Mehdi Asali, was quoted as saying by the Shargh daily newspaper on Wednesday.

“How can they expect Iran to cooperate now and pay the price?” he said. “We have repeatedly said that Iran will increase its crude output until reaching the pre-sanctions production level.”

The freeze plan has so far failed to push up oil prices, due to concerns Iran would not participate and that a deal would do little to ease the global glut as it would still allow Russia and Saudi Arabia to keep pumping at near record levels.

Venezuelan Oil Minister Eulogio Del Pino, Iraqi Oil Minister Adel Abdel Mahdi and Qatari Energy Minister Mohammad bin Saleh al-Sada sat down with Zanganeh at 3 p.m. (1130 GMT).

The sanctions, imposed over Iran’s nuclear programme, were lifted last month after an agreement with world powers, allowing Tehran to resume selling oil freely in international markets.

Iran exported around 2.5 million barrels per day (bpd) of crude before 2012, but sanctions cut that to around 1.1 million bpd. Tehran has pledged to raise supply by around 1 million bpd in the next 6-12 months.

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell