Iran’s Minister of Petroleum Bijan Namdar Zangeneh speaks to journalists at a meeting of the Organisation of the Petroleum Exporting Countries (Opec) at its headquarters in Vienna on December 4. Oil prices have more than halved over the past 18 months to a fraction of what most Opec members need to balance their budgets.
Reuters
Dubai
Opec members that supply too much crude oil to the market are responsible for low prices, Iran’s oil minister said yesterday, two days after the group failed to agree on a production ceiling.
The Organisation of the Petroleum Exporting Countries (Opec), which accounts for about a third of world oil output, announced no change in policy at a meeting on Friday, setting the scene for more price wars in an already heavily oversupplied market.
Oil prices have more than halved over the past 18 months to a fraction of what most Opec members need to balance their budgets. Benchmark Brent and US crude futures fell nearly 2% after the meeting.
“The oil market anticipated Opec’s decision, and the countries with an excess of supply are responsible for the consequences,” Bijan Zanganeh was quoted as saying by Iran’s Shana news agency. “It is known which countries currently have an excess of supply and there is no ambiguity about who they are,” he added.
A year ago, Saudi Arabia pushed though an Opec decision to defend market share instead of cutting output, keeping supply high in the hope of driving high-cost producers such as US shale firms out of the market.
Ahead of Friday’s meeting, Zanganeh had called for Opec members to respect a self-imposed production ceiling of 30mn bpd to support prices, but said he didn’t expect them to reach an agreement. Opec’s actual production is well over 31mn bpd.
“There were two viewpoints at the meeting. One group thought there needed to be a production ceiling which, as well as stabilising the market, would also control the current oversupply in the market,” Iran’s oil minister said.
“This view was not endorsed.”
Prices are likely to come under further pressure next year, when international sanctions on Iran are due to be lifted under a nuclear deal reached in July.
Zanganeh says Iran has the right to reclaim the market share that Tehran lost under sanctions imposed in late 2011, and plans to increase exports by 1mn barrels a day after sanctions are lifted.
