Tehran: Recouping Oil Market Share Necessary

Tehran: Recouping Oil Market Share NecessaryTehran: Recouping Oil Market Share Necessary

Iran, boosting oil exports after the lifting of sanctions, is talking of a need to recoup its market share, OPEC sources said.

This is while Russian officials have decided they should talk to Saudi Arabia and other OPEC countries about output cuts, hinting that Moscow may be softening its steadfast refusal to cooperate over supplies, Reuters reported.

The prospect of supply restraint by the OPEC and rivals has boosted oil prices to almost $36 a barrel from a 12-year low close to $27 last week, despite widespread skepticism that a deal will happen. Iran wants to recover its position as OPEC's second-largest producer behind Saudi Arabia, which it lost in 2012 to Iraq when sanctions over its nuclear work forced Tehran to cut exports. Now, the recovery of market share is central, sources say.

"Because of the international sanctions, we lost 1.1 million barrels per day of our exports. So we have to go back to our share of the market," a source familiar with Iranian thinking said on Thursday.

With sanctions lifted this month, Iran says it is increasing its oil output by 500,000 barrels per day and boosting exports, a plan that other OPEC sources say makes any global cut agreement harder.

"Any deal is difficult to reach," said a non-Iranian OPEC source, who added that Iran would need to keep output flat or raise it by, say 100,000 bpd "since higher prices would mean more revenue without the need to raise production. But I doubt it, really".

OPEC officials are holding bilateral talks aimed at persuading Russia to participate in cuts alongside OPEC and for Iran to soften its position, industry sources say.

Venezuela and Algeria are among those holding these conversations, sources say. Russian Energy Minister Alexander Novak said on Thursday OPEC was trying to organize a meeting with other producers next month. No date has been set yet.

Iranian Oil Minister Bijan Zanganeh, attending a Franco-Iranian summit in Paris on Thursday, said Iran had not been contacted by Russia about any cuts in output.

It is too early to say whether a deal will occur or whether Iran's position would scupper any agreement. Some of OPEC's Persian Gulf members, in any case, are not overly concerned by the extra barrels from Iran. UAE Energy Minister Suhail bin Mohammed al-Mazroui said on Wednesday the glut would decrease even if Iran boosted output by 500,000 bpd due to the expected growth in global demand of at least 1.3 million bpd.