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Zanganeh Appeals for OPEC Unity

Zanganeh Appeals  for OPEC Unity Zanganeh Appeals  for OPEC Unity

Oil production ceiling of OPEC member states will not decline unless they forge a consensus in their next meeting on June 5 in Vienna, Mehr news agency quoted Oil Minister Bijan Namdar Zanganeh as saying Sunday.

Sounding rather unoptimistic about cuts in the crude production ceiling of the Organization of Petroleum Exporting Countries, he said, "It is unlikely that the member states will be interested in reducing their quotas under the current circumstances. The apparent outcome will be that there will be no change in crude prices and present situation will continue."

The minster was of the opinion that Iran and Saudi Arabia have mutual interest in OPEC.  "Negotiations on the sidelines of the summit with all members, including Saudi Arabia, are on our agenda. We should either focus on mutual interest or fight with the world all the time. To consolidate OPEC credibility and status in the global oil market we need to cooperate with all members."

"In the previous summit, eight out of 12 members were in favor of lowering the production ceiling. Now two more have joined the list," the minister said, adding that Obama's comment on oil production will affect neither the prices nor the market stability.

Renewing a legal restriction that forbids foreign financial institutions from purchasing petroleum and petroleum products from Iran last Tuesday, US President Barack Obama said" “I determine … that there is a sufficient supply of petroleum and petroleum products from countries other than Iran to permit a significant reduction in the volume of petroleum and petroleum products purchased from Iran by or through foreign financial institutions.”

Asked whether or not crude prices will reach $70  by the end of the year, Zanganeh responded by saying, "I am not a fortune teller."

On the critical issue of further cuts in gasoline subsidies and monthly quotas for private car owners in the country, he expressed the hope that the new prices would be released by the end of the weak.

The 166th Meeting of the Conference of the Organization of the Petroleum Exporting Countries (OPEC) was held in Vienna last November under the Chairmanship of its President Abdourhman Ataher Al-Ahirish, Libya's deputy prime.

Declaring its concern over the rapid decline in oil prices since the summer of 2014, the conference concurred that stable oil prices in the past allowed producers to receive a decent income and invest to meet future demand. 

Accordingly, in the interest of restoring market equilibrium, the meeting decided to maintain the production level of 30 mb/d as was agreed in December 2011.  In taking this decision, the member states confirmed their readiness to respond to developments which could have an adverse impact on the maintenance of an orderly and balanced oil market.

 

Financialtribune.com