Persian Gulf OPEC Delegate: No Production Deal Without Iran

Persian Gulf OPEC Delegate: No Production Deal Without Iran ...
wsj.com 17/08/2016 Economy

Keywords:#2015, #Algeria, #Arab, #Arabia, #Asalouyeh_Seaport, #Benoit_Faucon, #Eulogio_del_Pino, #International_Monetary_Fund, #Iran, #Iranian, #Iraq, #Javad_Zarif, #Mohammad_Javad_Zarif, #Nigeria, #OPEC, #Organization_of_the_Petroleum_Exporting_Countries, #Persian, #Persian_Gulf, #Qatar, #Reuters, #Russia, #Saudi, #Saudi_Arabia, #South_Pars, #Tehran, #Twitter, #Venezuela, #Wsj.com

Iran doesn’t expect to reach presanctions output by September
A general view shows a unit of South Pars Gas field in Asalouyeh Seaport, north of Persian Gulf, Iran in this November, 2015 file photo. Iran on Tuesday undercut hopes of an agreement to limit petroleum output next month, saying it doesn’t expect that its production will have risen to the levels the country has said it needs. Photo: Reuters

* * * By Benoit Faucon and Summer Said
Updated Aug. 16, 2016 1:43 p.m. ET
Iran on Tuesday undercut hopes of an agreement to limit petroleum output next month, saying it doesn’t expect that its production will have risen to the levels the country has said it needs to justify cooperation with its rivals.
The spotlight has been on Iran in recent weeks after the Organization of the Petroleum Exporting Countries, a 14-nation cartel that counts Iran as a member, said it would hold discussions in late September about whether action was needed to lift oil prices. While global production has fallen back in line with demand, large blocks of stored oil continue to keep prices below $50 a barrel.
In April, Iran refused to join other OPEC members like Qatar, Venezuela and Saudi Arabia and nonmembers like Russia in an agreement to limit production and potentially raise prices. The country’s oil officials said that, before considering cooperation, their production had to rise to between 4 million and 4.2 million barrels a day.
On Tuesday, an Iranian press official said the country likely wouldn’t be pumping that much oil when the renewed OPEC discussions begin in late September, and pointed out that Iran had never announced a time-frame for that level. The level is important because it is what Iranian officials say represented the country’s market share before the West tightened sanctions over the country’s nuclear program, crippling Iran’s oil industry.
According to OPEC, Iran’s production has stagnated to around 3.6 million barrels a day in the past two months, after rising by 600,000 barrels a day after sanctions were lifted in January.
The press official said Iran hadn’t decided whether it would join other OPEC members in talks over production levels in Algeria at an energy conference scheduled to begin on Sept. 26.
Persian Gulf producers said there would be no agreement if Iran doesn't join the cap—a longstanding condition set by Saudi Arabia and its Arab neighbors. “Iran has to be there or there will be no freeze,” one OPEC delegate in the region said.
The assessment from Iran comes as other OPEC members express pessimism about those talks bearing much fruit. Oil ministers in Iraq and Nigeria both said they expect no production cuts to come out of the meeting.
OPEC members have been unable to agree on ways to curb their production for almost two years since oil prices began a free fall, descending to $27 a barrel this year—a 12-year low—from highs of $115 a barrel in 2014. Instead, the group’s members have pumped at full tilt and competed for their slice of the export market.
An extended period of low prices, though, has devastated OPEC members like Venezuela, where consumer-price inflation is forecast by the International Monetary Fund to hit 480% this year and the military now controls food stocks after widespread looting. Most countries that rely heavily on oil revenue need much higher prices to balance their national budgets.
Venezuela’s oil minister Eulogio del Pino was in Tehran this week, meeting Iran’s foreign minister Mohammad Javad Zarif on Monday, according to Mr. del Pino’s official Twitter account. Mr. del Pino is on a whirlwind tour of oil-producing countries to build support to limits on output.
But calls for production limits are coming as countries like Iraq and Saudi Arabia are pumping more oil than ever. Iraq’s new oil minister Jabar Ali al-Luaibi on Tuesday pledged to work “day and night on increasing the national production of oil and gas.”
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