News ID: 169387
Published: 0335 GMT September 27, 2016
Iran won’t freeze output

Minister: OPEC should restore quota system for oil output

Minister: OPEC should restore quota system for oil output

Iranian Oil Minister Bijan Zanganeh said in the medium- to long-term, OPEC should restore a quota system for oil output.

The organization must take measures to stabilize the revenues of its members, Zanganeh was cited as saying by Shana.

He was addressing the first session of the International Energy Forum (IFE) which will continue until September 28.

The oil minister said oil is not a weapon to be used for harming rivals.

“Oil is not a weapon, and it should not be used as a lever to harm rivals and materialize political objectives,” said Zanganeh. “I am afraid certain parties have lowered oil prices to a level that has harmed the interests of other producers.”

He said, “At present, the continued fall in oil prices is the most important issue facing the market; lower prices have thus far had negative consequences and will continue to do so in the future.”

Iran is not willing to freeze its oil output at current levels and doesn’t intend to forge an agreement with other major crude producers at talks in Algiers this week, Zanganeh told Bloomberg Television in an interview Tuesday, on the eve of an informal OPEC meeting in Algeria's capital.

Iran wants to raise its crude production to four million barrels per day, he said.

"Very soon this production will be implemented and we will increase our production" to four million barrels per day (bpd), he said, from the current level estimated at between 3.6 million and 3.8 million bpd.

The minister pointed out that Iran was investing to increase its output to pre-sanctions levels.

OPEC’s third-largest producer – with daily output of 3.6 million barrels last month –will talk to other members at the International Energy Forum (IFE) in Algiers, and it’s possible the group could reach a formal supply deal at its November meeting in Vienna, he said.

“It’s not our agenda to reach agreement in these two days,” Zanganeh said. “We are here for the IEF and to have an informal consultative meeting in OPEC to exchange views; not more.”

He said the informal OPEC gathering due Wednesday is "just a consultation meeting ... If there is a decision, it should be taken at the next (OPEC) meeting in Vienna in November," AP reported.

The informal OPEC meeting today is being held in a bid to reach a consensual agreement to stabilize the oil market by major oil producers.

The focus of the meeting will be a proposal by Saudi Arabia for producers to keep their oil output at January levels — what Riyadh believes will help stabilize market prices.

Cartel members are to meet with key non-OPEC producer Russia on the sidelines of the International Energy Forum (IEF) in the Algerian capital.

They are expected to discuss ways to strengthen prices that have been depressed since 2014 amid a stubborn supply glut.

Iran has so far rejected calls to freeze its output as unfair, and emphasized that it will go ahead with its plans to increase its oil production.

Nevertheless, Iran has made it clear that it is ready to join the plan after its output reaches the pre-sanctions level of four million barrels per day.

The country had been under years of sanctions which limited its oil exports to one million barrels per day and was also barred from foreign investments in its oil industry.


Prices drop


The comments by Zanganeh sent oil prices dropping further. The US contract for crude oil was down 95 cents, or about 2 percent, at $44.98 a barrel, having traded roughly flat earlier in the day.

Despite shrinking hopes for a deal on freezing output levels, Algerian Prime Minister Abdelmalek Sellal urged participants to overcome their differences to reach a "balanced price."

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