Zanganeh: Oil Prices Set by Global Factors

Zanganeh: Oil Prices Set by Global Factors
Zanganeh: Oil Prices Set by Global Factors

Iran's Oil Minister Bijan Namdar Zanganeh on Tuesday said oil prices are determined by global factors and he has no control over crude price-setting.

Critics have accused Zanganeh of adopting wrong policies and selling oil for cheap, but the official dismissed the criticisms, stressing that he cannot influence prices single-handedly.

"One individual can't change global crude prices. Iran produces one million barrels of oil per day and its bargaining power is determined by its output," he told a press conference on Tuesday, Shana reported.

Zanganeh said he took charge of the Oil Ministry when crude prices were spiraling downward and blamed the "oil war" in the Middle East as one of the reasons behind the price plunge.

"Political climate in the region is unstable … We can't negotiate with them (neighboring oil producers) when they are mobilized against Iran."

OPEC had vowed to keep the price of oil above $100 a barrel for the foreseeable future, but in mid-2014, the price of oil began to tumble. It fell from a peak of above $115 a barrel to below $50 in January. The organization was seen as the major cause of cheap oil as it refused to cut oil production, leading to the tumble in oil prices.

Brent crude was trading down $2.70, or about 6%, at $42.80 a barrel on Monday, after hitting a session low of $42.51, its weakest since March 11, 2009. US crude also closed down $2.21 at $38.24 a barrel, which was the lowest since February 2009.

Earlier this week, Zanganeh insisted that Iran will ramp up production "at any cost and we have no other alternative", adding that if oil production hike is not done promptly, the country could lose market share permanently.

The minister said he was criticized for renewing a contract to import drilling rigs, but critics went silent with regard to the "unconventional import of drilling rigs" in the past.

Zanganeh mentioned a controversial "missing" oil rig, purchased in 2011, and took a swipe at his critics who denounced his policies. A foreign drilling rig was reportedly bought in 2011 during the tenure of former president Mahmoud Ahmadinejad for $78 million, but oil officials said earlier this year the rig was never delivered to Iran in the first place and the recipient of the payment is not clear.