The head of Russia's state-run oil company Rosneft said he expected Iran to ramp up oil production to between 5 million and 6 million bpd by 2025 from 3 million now, as the country opens up after the lifting of sanctions.
But Igor Sechin sounded a more cautious note regarding the idea of a coordinated output cut by major oil-producing countries to prop up sagging prices. “Tell me who is supposed to cut?” Sechin said on the sidelines of a conference in London. “Will Saudi Arabia cut production? Will Iran cut production? Will Mexico cut production? Will Brazil cut production? Who is going to cut?”
Sechin suggested major oil producing countries cut output by 1 million barrels per day to reduce oversupply, which he estimated at 1.5 million bpd.
"A coordinated supply cut by major exporters by around 1 million barrels per day would sharply reduce uncertainty and would move the market towards reasonable pricing levels," he said. Oil prices have slumped more than 70% to near $30 a barrel over the past 18 months as supply exceeded demand after OPEC, seeking to drive higher-cost producers out of the market, decided not to cut production. Sechin declined to say whether Russia would participate in any coordinated cut. He has in the past criticized OPEC's strategy, saying the group, of which Russia is not a member, had "lost its teeth".
“We are working on preserving our traditional markets and we will supply those markets with oil in a competitive battle,” said Sechin, adding that his responsibility is to ensure shareholders do not lose money as part of any talks on managing global oil markets.
Sechin also said US shale production, another key driver behind the global glut, would decline in the long term.
"Shale oil production has its limitations in scope and time ... US shale oil production will reach its peak in 2020," he said.
