Iran is not willing to freeze its oil output at current levels and doesn’t intend to forge an agreement with other major crude producers at talks in Algiers this week, the nation’s oil minister said.
Iran wants to raise its crude production to 4 million barrels a day, Bijan Namdar Zanganeh said on Tuesday. OPEC’s third-largest producer — with daily output of 3.6 million barrels last month — will talk to other members at the International Energy Forum in the Algerian capital and it’s possible the group could reach a formal supply deal at its November meeting in Vienna, he said.
“It’s not our agenda to reach agreement in these two days,” Zanganeh said. “We are here for the IEF and to have a consultative informal meeting in OPEC to exchange views. Not more.”
OPEC’s decision to hold informal talks this week has fanned speculation that it might be about to deviate from a two-year-old policy of pumping without limits, which succeeded in hurting rival suppliers but also sent prices into free-fall. Ministers from member countries arriving in Algiers have downplayed the prospect of a deal. Iran rejected Saudi Arabia’s offer last week to cut its own production if Iran capped output at current levels.
Iran, never as dependent on oil revenue as its Gulf neighbor, has seen its prospects boosted by rapprochement with the west that removed sanctions on oil exports in January. In Saudi Arabia, tentative moves toward economic reform haven’t prevented two years of weak prices causing financial havoc: it’s burning through foreign-exchange reserves, government contractors have gone unpaid and civil servants will get no bonus this year.
The oil market is trending in the right direction, with inventories shrinking as supply and demand have converged, Saudi Minister of Energy and Industry Khalid Al-Falih told reporters Tuesday. The Saudi economy is doing very well, he said.
Zanganeh said Iran wants to get back its pre-sanctions share of OPEC production of about 13 percent. The group’s 14 members pumped 33.7 million barrels of crude a day last month, meaning Iran could be targeting output as high as 4.4 million, according to data compiled by Bloomberg. That’s about 750,000 barrels a day more than the nation produced last month, the data show.
In the medium to long term, OPEC should restore a quota system for oil output, Zanganeh was cited as saying by the Iranian Oil Ministry’s Shana news service. The organization must take measures to stabilize the revenues of its members, he said.
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