OPEC Here to Stay

OPEC Here to StayOPEC Here to Stay

Ali Dadpay, a faculty member at Clayton State University in a telephone roundtable discussion said, "The best strategy to help Iran regain its lost position in the market is finding reliable customers, increasing production gradually and, more importantly, reducing dependence on oil," reported.

"Iran's oil-based economy has made it such a vulnerable exporter that volatile oil prices can weaken it easily," the lecturer said, adding that oil prices will undergo noticeable changes should Iran ramp up its production under current circumstances.  

On the critical issue of gradual return to the market, Professor Dadpay noted, "Doubling export capacity seem to be an arduous task, yet Iran has the capability to sell oil to its loyal customers. Nonetheless, the fact of the matter is that the market will not wait for Iran."

Answering a question about the role of non-OPEC members, in particular the US and Russia, in raising prices, the professor highlighted that for such states the rise in production would mean economic prosperity, that is why they will never show interest in curbing production.

Furthermore, unlike OPEC member states, the whole oil industry in Russia and the US is owned by private enterprises. Consequently, the government can neither limit the production ceiling nor affect prices.

Underscoring the fact that keeping the market share is the best strategy to be taken by OPEC, he reiterated that like other organizations, disagreement between members is quite natural, yet they ought to do their best to consolidate the organization's position.

According to the expert, OPEC member states lag behind the US and oil industry in North America is more dynamic, which explains why their fields go on stream much faster.

Dadpay is of the opinion that the organization has been able to play a key role in the energy market for more than five decades. Given the market instability in oil-rich states, he assumes stabilizing oil prices is such a great achievement that highlights OPEC's new mission.

Tehran is under punitive economic sanctions because of its nuclear program. After marathon talks in Lausanne, Switzerland, Iran and the P5+1 (Britain, China, France, Russia, the US plus Germany) reached a framework agreement on April 2 that calls for lifting all trade sanctions against Iran. The details of the agreement are to be finalized by a June 30 deadline.