10 April 2015, News Wires – OPEC’s strategy of holding output steady is not working and the group’s members should discuss production levels before its next meeting in June, Iran’s oil minister said, a sign of the pain lower prices are causing OPEC’s less wealthy producers.
However, Bijan Zanganeh also told Reuters it was up to other members of the Organization of the Petroleum Exporting Countries, OPEC, to make way for any extra Iranian crude that reaches world markets if Western sanctions on Tehran are lifted.
Oil prices have halved from the $115-a-barrel level hit last June, in a drop that deepened after OPEC refused to cut output, choosing instead to defend market share. Top exporter Saudi Arabia was the driving force behind the policy shift.
“It seems (OPEC’s strategy of not cutting output) does not work well, because prices are coming down,” Zanganeh told Reuters during a visit to Beijing. “We haven’t witnessed stable situations on the market.”
Iran was among the OPEC members that wanted an output cut at OPEC’s last meeting, in November. But the Gulf OPEC members, who account for more than half of the group’s output, refused to cut without the participation of non-OPEC producers. Brent crude oil hit a near six-year low close to $45 in January.
It was trading around $57 on Thursday, down from its 2015 high of $63. OPEC, which pumps one third of the world’s oil, may soon have to deal with an increase in supply from Iran if Western sanctions over its nuclear programme are lifted.