A US sale of crude stockpiles from the Strategic Petroleum Reserve shows that other producers cannot raise output enough and will only push prices higher, Iran’s OPEC Governor Hossein Kazempour Ardebili said on Thursday.
According to ILNA, Kazempour had previously warned the US that such a measure would have an adverse impact on oil prices.
He had predicted that the US would have to take resort to its crude stockpiles “without knowing how to use them rationally”.
The move is similar to that of Russia and Saudi Arabia, since the two countries have so far latched on to their crude reserves, despite their commitment to increase crude oil production by 1 million barrels per day. This is because they do not have the capacity to hike their crude production, the official added. The United States is set to release 11 million barrels of oil from its Strategic Petroleum Reserves ahead of Iranian sanctions that are set to go into effect on November 4. The SPR, which technically serves as emergency oil stockpiles, has only been tapped thrice since its inception, according to the Energy.gov website.
More often, the reserves have been tapped for test sales, to cushion the blow of minor supply disruptions and to generate revenue.
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