Iran supports oil producer accord

London - "If Iran's not part of the deal, it isn't worth much," said Eugen Weinberg, head of commodity markets strategy at Commerzbank in Frankfurt.



By Agencies


Published: Wed 17 Feb 2016, 11:00 PM

Last updated: Fri 19 Feb 2016, 8:15 AM

 Iran supported an accord by Saudi Arabia and Russia to steady global oil markets by capping their supply, without saying whether it would temper its own production.
Iran backs any measures to stabilise global oil markets including the plan outlined by the world's two largest crude producers to cap output at January levels, Iranian Oil Minister Bijan Namdar Zanganeh said after talks with fellow Opec members Qatar, Iraq and Venezuela. While the deal hinges on the cooperation of Iran, Zanganeh didn't say whether Tehran would deviate from plans to restore exports after international sanctions were removed last month.
"If Iran's not part of the deal, it isn't worth much," said Eugen Weinberg, head of commodity markets strategy at Commerzbank in Frankfurt.
"After fighting to end sanctions for years and finally being free of them, why Iran would choose to put sanctions on themselves by freezing their production?"
By merely capping supply rather than cutting it, the deal wouldn't succeed in tackling the global oil glut, Goldman Sachs Group and BNP Paribas said.
Iran, which was the second-biggest producer in Opec before sanctions were intensified in 2012, is seeking to boost output by one million barrels a day and regain market share. Iran should have increased production by 500,000 barrels a day by March 20, the end of the Iranian calendar year, Shana reported on Wednesday, citing Roknoddin Javadi, managing director of National Iranian Oil Co.
Earlier, Iran said on Wednesday it would resist any plan to restrain its oil output as fellow Opec ministers tried to persuade the country to join the first global oil pact in 15 years.
"Asking Iran to freeze its oil production level is illogical... when Iran was under sanctions, some countries raised their output and they caused the drop in oil prices." Iran's Opec envoy, Mehdi Asali, was quoted as saying by the Shargh daily newspaper on Wednesday. "How can they expect Iran to cooperate now and pay the price?" he said. "We have repeatedly said that Iran will increase its crude output until reaching the pre-sanctions production level."
The freeze plan has so far failed to push up oil prices, due to concerns Iran would not participate and that a deal would do little to ease the global glut as it would still allow Russia and Saudi Arabia to keep pumping at near record levels. 
 
 


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