Low crude prices have damaged Algeria's economy, said the deputy oil minister for international affairs.
Amirhossein Zamaninia, accompanying First Vice President Es'haq Jahangiri on a two-day official visit to Algiers last week, said, "Iran and Algeria are eager to find a solution to stop the further decrease in prices in collaboration with other OPEC members," Shana reported.
Stressing that OPEC members should undertake regular consultations to oversee the oil market activities, the official said, "Tehran and Algiers are determined to help stabilize oil prices in international markets."
Hydrocarbon sector accounts for 97% of Algeria's total exports and 58% of its total fiscal revenues, according to the International Monetary Fund. Zamaninia added that the two states will set up a joint technical committee to expand economic and energy cooperation.
He ruled out the submission of a proposal by Iran on negotiating with non-OPEC members like Russia and added that no talks were held regarding OPEC's emergency meeting.
Iran had proposed plans to restore stability to the chaotic oil market, which were welcomed by the Algerian oil officials.
Referring to oil and gas products' sales and marketing, the official noted that since it is active in more than 40 countries, Algeria is experienced enough to help Iran in this regard.
Zamaninia held separate meetings with Salih Khabri, Algeria's energy minister, and managing director of Sonatrach, the largest government-owned oil and gas company in Algeria and Africa.
Before leaving Tehran for Algiers last Wednesday, Jahangiri had hoped that adopting new policies in talks with Algeria as OPEC’s largest African member country would reverse the current downward trend in oil prices. According to Jahangiri, expansion of ties with not only neighboring states but also African countries tops Iran's economic agenda, for which regular oil consultations are necessary to help restore stability to the market, Shana reported.
WTI hit $34.29 a barrel, the lowest since February 2009, after the release of the Baker Hughes' report. It settled the day down 22 cents, or 0.6 percent, at $34.73. For the week, WTI lost 2.5%.
Brent finished the session down 18 cents, or 0.5%, at $36.88. Its session low was $36.41, just 21 cents above a 2004 bottom. Brent lost 3% on the week.
The price of OPEC basket of 12 crudes stood at $31.49 a barrel on Thursday, compared with $32.28 the previous day, according to OPEC Secretariat calculations.
Experts believe major oil producers have done nothing to cut production since October 2014 and they are unlikely to consider cutting output any time soon. The US, Russia and Saudi Arabia each have different reasons to maintain high output, but all three are stockpiling oil because they cannot find enough immediate buyers. Add on the inevitable return of Iran and Libya and the prospects of the 2 million barrels per day of excess production in the world, reduction can appear to be impossible.
Monetary tightening will reduce world growth and remove asset price inflation. Reduced growth, coupled with lower need for oil through efficiency and environmentalism, means demand for oil is not going to exceed supply for a long time to come. The oil price is not going to rise any time soon.
