Iran want's the price of OPEC's basket between $21-25 = WTI $23-27
Financial Times, Monday March 13
Tehran favours increase in oil output
Iran will support a small increase in Opec production when oil ministers meet on March 27 if market prices remain at current highs, according to Hossein Kazempour Ardebili, Iran's member on Opec's board of governors.
Mr Ardebili, who is also senior adviser to Iran's oil minister, said Iran was in favour of keeping the average price of Opec's basket of seven crudes between Dollars 21 and Dollars 25, a range he described as good for producers and consumers.
"If when we meet the prices are above this range it indicates we should probably increase the production ceiling," Mr Ardebili commented, stressing that this was his "personal" view. But, he added, it was important that Opec introduce "small-scale change for short terms" that could be adjusted for market conditions.
He said that if the Opec basket price was above Dollars 29, Opec should consider raising its collective output by 500,000 barrels a day (bpd) for three months, and by 1m bpd if the price was over Dollars 30.
Mr Ardebili also made it clear any production increase agreed at the Vienna meeting should take into account above-quota production by some Opec members, which he did not name.
His comments were the clearest indication of Iran's position since the oil ministers of Iran and Saudi Arabia issued a statement on March 8 saying that "current market conditions and outlook necessitate oil producers from Opec and non-Opec provide adequate and timely supplies to balance the market".
Saudi Arabia is Opec's biggest producer, with output last month of about 7.8m barrels a day, according to the International Energy Agency, while Iran produced about 3.4m b/d in February.
With Iran regarded as a price "hawk", the joint statement led to a fall of about Dollars 3 in oil prices, with Brent crude trading at Dollars 29.04 by the end of last week.
Tehran analysts said Mr Ardebili appeared to be trying to talk the market down ahead of the March 27 meeting.
In agreements signed in 1998 and 1999, Opec, excluding Iraq, and some non-Opec producers such as Oman, Norway and Mexico, agreed to remove about 5m bpd from the market through to March 31 this year to raise prices.
Iran had said the oil market did not warrant an increase during the second quarter, mainly because of an expected drop in demand. But Mr Ardebili noted that US refineries, which he said were currently producing at a utilisation rate of 82 to 83 per cent, could increase to possibly more than 95 per cent in the next few months.
Mr Ardebili admitted there were differences of opinion within Opec on pricing. "Some people would say Dollars 25 is fine. Others would say Dollars 21 is more than enough. This is natural in an organisation like Opec," he commented.
Within Iran there has also been strong opposition from hardliners to US pressure on Opec members, mainly Saudi Arabia, to boost output before the summer motoring season, especially during a presidential election year. |
