11 April 2015, News Wires – The strategy implemented by Opec of not cutting output has “not worked well”, Iran’s Oil Minister Bijan Zanganeh reportedly said, according to a report.
During a visit to Beijing, Zanganeh’s first since taking on his current role two years ago, he encouraged discussion between Opec members on crude production levels ahead of the group’s next meeting in June.
Zanganeh said that Opec will then be able to “co-ordinate itself” to accommodate Iran’s possible return to oil markets without causing a price crash, Reuters reported.
“It seems [Opec’s strategy of not cutting output] does not work well, because prices are coming down. We haven’t witnessed stable situations on the market,” the news wire reported Zanganeh as saying on Thursday.
Last week, Iran met with world powers to reach a framework deal on limiting the country’s nuclear weapons capability in return for dropping economic sanctions against it.
Iran has always contended that its nuclear programme is for civilian use only.
Iran, which has been losing oil income as exports from the country have been cut by more than half to around 1.1 million barrels per day from a pre-2012 level of 2.5 million bpd, hopes to boost its exports by as much as one million bpd in just two months.
This is dependent, however, on a final agreement being reached on its nuclear programme and sanctions being lifted.
The state of talks on the Iran nuclear issue last week had a disproportionate effect on prices, according to analysts, who pointed out that a relaxation of international energy sanctions did not mean that significant amounts of Iranian crude would quickly come on to global markets.
Sanctions could take some time to dismantle and Iran itself might struggle to raise output and exports.
Meanwhile, Iran also hopes to resolve differences with Chinese energy companies on oil and gas projects in the Islamic republic, so that production can be ramped up again quickly, Zanganeh said.