Iranian news agency Shana quoted on Monday manager director of Iran’s Central Oil Fields Company, Salbali Karimi, as saying Iran’s cost of production stood $1-$1.5 per barrel, in a clear indication it would ramp up output in any price scenario.
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During the last week, the Brent / WTI premium has almost halved to $1.8 per barrel, as OPEC recorded high production and drillers in the USA are continuing to produce large amounts of crude.
Oil resumed its slide on Tuesday (Dec 15) after rebounding from the lowest prices in more than six years.
The cartel’s output is accounted for around 40 percent of the global crude output. Democrats, however, have voiced their reservations, demanding renewable-energy tax credits in return.
Oil’s problem has hinged on oversupply, a situation that would be exacerbated when Iran is once again allowed to start selling oil to the world, after the United Nations lifts sanctions, sometime in 2016, that have banished the country from selling oil due to its nuclear activities.
It revised its forecasts after oil prices fell below $40 a barrel this month, after Opec stuck by its strategy of pumping more oil to hold on to its share of the market and, it hopes, weaken smaller U.S. producers. House Democrats are open to lifting the ban on American crude exports if they get adequate concessions in exchange, a Democratic leadership aide said Monday. Pradhan said during his hour-long meeting with Badri and his team, he sought “reasonable and responsible” pricing from the Opec. India – and other emerging economies that depend on oil imports – have benefitted immensely from falling prices since June 2014 as they had to spend less on crude shipments. Shri Pradhan gave Indian perspective on developments in the global oil market. “But we also need to consider that we are at multi-year lows” that may spark a recovery, he said.
OPEC decided earlier this month against cutting production, giving rise to speculation that the glut will continue for an extended period.
Oil price dropped below $35 a barrel for the first time since the financial crisis in 2008 as Iran says that it would continue to boost oil exports, which worsen the concern about the oil glut.
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Oil prices retreated in Asian trading hours today following fresh indications of growing oversupply ahead of the US Federal Reserve’s long-awaited decision on interest rates. “Russia has also greatly increased production, and the possibility that sanctions will be lifted on Iran in 2016 could flood the market with even more supply”.
