37509
OPEC Skeptical on Iran, Unlikely to Cut Output
Energy

OPEC Skeptical on Iran, Unlikely to Cut Output

OPEC is very unlikely to cut output at its next meeting in June, even if prices remain extremely low, according to OPEC sources and delegates, as it will be too early to say how fast Iranian output is rising.
The sources, which include officials from the Middle East, say OPEC countries such as Saudi Arabia also want to test Russia's commitment to freezing output before taking any further steps to stabilize prices, Reuters reported.
"Maybe by the end of the year (a cut could be possible) when it is really clear that Iran is actually producing the volumes they are talking about. But not in June," a source from one of OPEC's Middle Eastern producers said.
January was peak or near-peak production for Russia and Saudi Arabia, the world's two top oil exporters, but Iran is the key supply uncertainty for 2016 as it is raising output after the lifting of western sanctions in January, adding barrels to the already saturated market.
Over the past month, Iran has said it could add up to 1.5 million barrels per day over the next year, which would confound market skepticism that its fields were damaged by years of sanctions.
"No one at OPEC knows what's going on with Iranian fields. So the Saudis want to see what happens in reality," a source in one of the OPEC delegations who is familiar with production freeze negotiations, said.
Non-OPEC Oman and some OPEC sources have floated an idea of Iran being exempt from output freezes–as was Iraq in the past when the country was subject to international sanctions—but so far Tehran has not been offered any special terms, according to OPEC sources.
Last week, Iran's Oil Minister Bijan Namdar Zanganeh laughed out a proposal to freeze oil output.
Analysts believe Iran's output and exports could rise by a maximum of 0.7 million bpd to around 3.5 million bpd in the next months, but it will take time to understand where real figures stand.
By June, when OPEC holds its next meeting, the picture of Iranian exports will still not be clear, several OPEC sources said, adding that they might only have reliable numbers for April.
The sources also said it will be too early to say in June if the world's record oil stocks have finally begun to shrink.
Saudi Arabia and Russia have not said the output freeze would be void if Iran refuses to join in, leaving room for a potential compromise.

Short URL : http://goo.gl/1ptyRm
  1. http://goo.gl/7JWnar
  • http://goo.gl/jGog33
  • http://goo.gl/HbyhUl
  • http://goo.gl/3tSp87
  • http://goo.gl/I1CoqC

You can also read ...

Russia Says US Sanctions on Iran "Unproductive"
United States' sanctions on Iran's oil industry are...
China to Cut Solar, Wind Subsidies
China will speed up efforts to ensure its wind and solar power...
Oil Coalition Seeks Consensus Ahead of Algiers Summit
With a critical meeting in Algiers fast approaching, a...
Abu Dhabi Planning Biggest Oil  IPO in Decade
Abu Dhabi is pushing ahead with an initial public offering for...
Crude Prises Higher as Supply Concerns Rise
Oil prices rose on Monday as investors worried about the...
Abadan  Refinery  Second Phase  on Track
The second development phase of Abadan Oil Refinery in...
New Power Capacity for Sistan-Baluchestan
Operations to build new combined-cycle power plants in...
ICOFC to Develop  Eight Gas Fields
Iranian Central Oil Fields Company plans to develop eight gas...

Trending

Googleplus