Energy
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OPEC Chief to Discuss Oil Freeze in Tehran

The OPEC chief is expected to discuss global oil developments and ways of controlling crude prices
Analysts say failure to reach an agreement on capping production may deal a blow to oil prices.Analysts say failure to reach an agreement on capping production may deal a blow to oil prices.

OPEC Secretary-General Mohammed Barkindo will visit Tehran on Monday to discuss the prospect of an oil freeze deal with Iran's Oil Minister Bijan Namdar Zanganeh ahead of a gathering of OPEC states in Algeria this month, a top Oil Ministry official said on Saturday.

"The newly-appointed secretary-general of the Organization of Petroleum Exporting Countries visits member states, including Iran, to introduce his managerial plans. But he's not coming just to visit," Amirhossein Zamaninia, deputy for international and commercial affairs at the Oil Ministry, was quoted as saying by Eghtesad Online.

"Barkindo will discuss the oil production freeze plan, global oil market and ways to control crude prices," he said.

Barkindo, who was previously the managing director of Nigerian National Petroleum Corporation, replaced Abdalla El-Badri as the head of the 14-nation group on Aug. 1.

There are speculations that the visit will be largely ceremonial as Iran has made clear its intentions to recoup the oil market share it lost when international sanctions were imposed over its nuclear program.

Zanganeh confirmed last month that he will attend the freeze talks scheduled on the sidelines of the International Energy Forum in Algiers on Sept. 26-28.

However, he has repeatedly insisted that Iran is making its way back into the market after being unshackled from international restrictions over six months ago, blaming other producers are responsible for the current oil glut.

"Iran will support every move to prop up prices and restore stability to the oil market, as long as its national interests are preserved," Zamaninia added.

In a rare convergence of interests, OPEC and outside producers, including Russia, pushed for an output freeze pact in an emergency meeting in Doha, Qatar, in April, but Saudi Arabia sabotaged months of planning and negotiation because Iran had refused to join the talks.

Analysts say failure to reach an agreement on capping production may deal a blow to oil price, which is now less than half of its peak in mid-2014.

Oil traded around $115 a barrel in 2014 but slipped to $26, its lowest level since 2004, before reaching the $40-50 price range.

Brent settled at $46.83 a barrel on Friday, though it was down 6% for the week, its biggest drop in five weeks.

Russian President Vladimir Putin also voiced support for Iran's oil production plans in an interview with Bloomberg on Thursday.

“Iran is starting from a very low position, connected with the well-known sanctions in relation to this country. It would be unfair to leave it on this sanctioned level,” Putin said.

Iran is currently the third largest producer in the Organization of Petroleum Exporting Countries. Saudi Arabia, the world's top oil exporter and de facto leader of the group, posted a record output of 10.67 million bpd in July, followed by Iraq that produced 4.6 million bpd, according to an OPEC report published last month.

Financialtribune.com