Producers that destabilised oil markets have the greatest responsibility to steady them, Iranian Oil Minister Bijan Namdar Zanganeh said last month, according to the Shana news service, without identifying any such countries.
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Iran has said it supports measures that would stabilize the market, but has never indicated that it would join the production-freeze party. Director for International Affairs Seyed Mohsen Ghamsari told CNBC on September 7 that Iran’s oil output had reached 3.8 million barrels per day and that it would increase production.
OPEC and Russian Federation tried earlier this year to curb the glut by seeking an output freeze, but the deal collapsed in April due to tension between Saudi Arabia and Iran.
Oil prices inched lower on Wednesday as market participants remained skeptical that producers will reach an agreement to freeze output to rein in a global supply glut.
Crude oil prices at one point jumped more than 6 percent in trading Monday lightened by the US holiday after Saudi Arabia and Russian Federation issued a joint statement on a need to correct a market characterized by oversupply.
“While talk of a production freeze is easy, achieving one will be more hard, with Iran still poised to increase output to 4.0 (million barrels per day) and Nigeria plotting a recovery”.
Iran is not at all keen on curbing output, however, and has so-far ruled out any production freeze, putting it at odds with the rest of the group.
“The most important issue is whether Saudi Arabia will cut its production to pre-summer levels”, said Anas al-Hajji, an independent analyst and former chief economist at NGP Energy Capital Management LLC in Houston.
Its total production has risen from 2.7 million bpd to 3.85 million bpd, close to the level before worldwide sanctions were imposed in 2012.
Iran has been trying to regain market share after the United States and other nations lifted nuclear-related sanctions.
Iran has been the main factor preventing an output deal between OPEC and non-OPEC Russia as Tehran has said it should be excluded from any such agreement before its production recovers.
NIOC may raise its production capacity to 4.3m barrels per day in the first quarter of 2017 and to 5.0m bpd in two to three years, he added, noting that the majority of any new production would be of the so-called “heavy” variety.
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In the short term, dollar weakness following soft USA economic data could support oil as non-US investors take advantage of a relatively cheaper currency to buy dollar-denominated assets.
