Zanganeh Blames OPEC for Low Crude Prices

Zanganeh Blames OPEC for Low Crude PricesZanganeh Blames OPEC for Low Crude Prices

OPEC members that supply too much crude oil to the market are responsible for low prices, Iran's oil minister said on Sunday, two days after the organization failed to agree on a production ceiling.

"The oil market anticipated OPEC's decision and the countries with an excess of supply are responsible for the consequences," Bijan Namdar Zanganeh was quoted as saying by Iran's Shana news agency, Reuters reported.

"It is known which countries currently have an excess of supply and there is no ambiguity about who they are," he added in a thinly-veiled barb at top exporter Saudi Arabia.

The Organization of Petroleum Exporting Countries, which accounts for about a third of world oil output, announced no change in policy at a meeting on Friday, setting the scene for more price wars in an already heavily oversupplied market.

Oil prices have more than halved over the past 18 months to a fraction of what most OPEC members need to balance their budgets. Benchmark Brent and US crude futures fell nearly 2% after the meeting. A year ago, Riyadh pushed through an OPEC decision to defend market share instead of cutting output, keeping supply high in the hope of driving high-cost producers such as US shale firms out of the market.

Ahead of Friday's meeting, Zanganeh had called for OPEC members to respect a self-imposed production ceiling of 30 million barrels a day to support prices, but said he did not expect them to reach an agreement.

OPEC's actual production is well over 31 million barrels a day.

"There were two viewpoints at the meeting. One group thought there needed to be a production ceiling which, as well as stabilizing the market, would also control the current oversupply in the market," he said. "This view was not endorsed."

Prices are likely to come under further pressure next year, when international sanctions on Iran are due to be lifted under a nuclear deal reached in July.

Zanganeh says Iran has the right to reclaim the market share that Tehran lost under sanctions imposed in late 2011 and plans to increase exports by 1 million barrels a day after sanctions are lifted.