Publishe Date: 4:59 PM - 3/12/2018 | Print

Tehran after restraining oil price around 60: Iran minister

Economy - Iranian petroleum minister says that the country wants OPEC to endeavor to keep oil price at about 60 dollars per barrel in order to restrain shale producers.

'If the price jumps [to] around $70…it will motivate more production in shale oil in the United States,' Bijan Zangeneh said talking to the Wall Street Journal in an interview.

The reaction of the US shale producers to $70 a barrel was a focal point in January, when Brent crude briefly breached that level, the American daily newspaper reported.

Iran will press for carefully bringing back some of its own production, Zangeneh said, potentially putting downward pressure on oil prices.

The country pumps about 3.8 million barrels a day and could produce about 100,000 barrels a day more, the Journal wrote.

Zangeneh said Organization of Petroleum Exporting Countries (OPEC) could agree in June to begin easing current production limits in 2019. The Saudis have expressed openness to that idea, the American daily said.

It added the debate over prices reflects a shift in OPEC’s internal dynamics. Previously, Iran had long advocated for higher prices, while Saudi Arabia had been a voice of restraint.

Zangeneh expressed skepticism over OPEC’s previous efforts to contend with shale production. He told The Journal that a meeting last Monday in Houston between top OPEC officials and shale-company executives was unnecessary because U.S. producers can’t reach comprehensive agreement on output.


'It’s 1,000 entities. They don’t have an union' of shale producers, he said. A production 'cut is the only thing that OPEC has to manage the market.'

In late February, Iran's SHANA energy network held an interview with a veteran oil expert Mehdi Asali who also talked of oil prices.

'Saudi Arabia's presence in the US shale boom will provide Riyadh the necessary intelligence of the industry to ensure a better position in the OPEC, in order to affect the crude oil market.

'For example, a heated topic regarding US shale oil is the discussion that at which price range the item's production can highly increase to slash the prices,' Asali said during the interview with Shana (which Persian acronym stands for 'Petroenergy Information Network'.

'The presence of Aramco (Saudi Arabian Oil Company) in the shale oil market will provide the Saudis with accurate, in-depth information about production, process, and dynamics of manufacturing technology and investment in the financial markets in the industry, which will provide Saudi Arabia with the benefits and risks of these investments, which can lead to more effective positions in the oil markets and OPEC. And as a result, it will help Riyadh to better manipulate OPEC decisions,' the Iranian expert said.

 

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