Current crude prices at about $68 a barrel are unsustainable and will rise to $80 by the end of next year as US supply slows, deputy oil minister said.
“From a commercial point of view, we believe today’s price is not sustainable,” Roknoddin Javadi, who is also managing director of the National Iranian Oil Company (NIOC), said Thursday at a news conference in Tehran.
“Based on trends and information we have and what’s happening in the US drilling sector and a consequence for the related industry, our expectation is that by the end of 2016 we can see this figure of $80,” he was quoted by Bloomberg as saying.
North Sea Brent crude, an international benchmark, fell 16 cents to $65.38 a barrel on the London-based ICE Futures Europe exchange on Friday.
Oil has rebounded about 50 percent from a six-year low in January as drillers in the US reduced the number of active rigs to the fewest since September 2010, slowing production.
Iran, the fifth-biggest producer in the Organization of Petroleum Exporting Countries, pumped 2.78 million barrels a day in April, according to data compiled by Bloomberg. Iran has been stockpiling oil in supertankers in the Persian Gulf, data compiled by Bloomberg show.
While estimates vary from as little as 7 million barrels to 35 million barrels, Barclays Plc and Societe Generale SA predict this crude would be first to be sold abroad if there’s an agreement on Iran’s nuclear program.
“We don’t have very much oil in floating storage -- as much as operationally needed,” Javadi said, without giving details.
Iran’s oil output capacity will rise to 3.96 million barrels a day by next March from 3.8 million in March this year, he said. “Our most important job this year is securing financing for development projects, for which the parliament has allocated $100 billion.”
