In the past two weeks, Iran has rejoined the OPEC production freeze headline and jawboning fray, by making bold statements that it would be willing to work with OPEC on the recurring plan other members, mostly Venezuela, have proposed to push prices higher, namely freeze oil production (at a level which is an all-time high output for OPEC's largest member, Saudi Arabia, beyond which it can't produce even if it wanted). So earlier today, Iran's oil minister Bijan Zanganeh made the most explicit statement on the topic, when he laid out the conditions under which Iran would be willing to "help other oil producers stabilize the world market."
It was a simple condition: Iran will cooperate as long as it is excluded from the freeze, or as Reuters put it, Iran will cooperate "so long as fellow OPEC members recognize its right to regain lost market share, the country' oil minister said on Friday."
In other words, Iran will endorse an OPEC supply freeze as long as it can keep pumping more.
Iran, OPEC's third-largest producer, boosted output after Western sanctions were lifted in January, and had refused to join OPEC and some non-members in an accord earlier this year to freeze production levels.
"Iran will cooperate with OPEC to help the oil market recover, but expects others to respect its rights to regain its lost share of the market," Bijan Namdar Zanganeh was quoted as saying by the oil ministry's news agency SHANA.
More from Reuters:
Asked about an oil output freeze plan, Zanganeh said that Iran supports any effort to bring stability to the market.
Tehran insists it will be ready for joint action only once it regains pre-sanctions output of 4 million barrels per day (bpd). It pumped 3.6 million bpd in July, OPEC figures show.
Zanganeh said Iran had no role in instability of the oil market, as the crisis happened when Tehran's exports were less than 1 million bpd. Related: Could A Lithium Shortage De-Rail The Electric Car Boom?
Members of the Organization of the Petroleum Exporting Countries will meet on the sidelines of the International Energy Forum (IEF), which groups producers and consumers, in Algeria on Sept. 26-28.
It goes without saying that the argument trotted out by Iran will be the same one used by all other OPEC members, most of whom are not in the same position as Saudi Arabia, and instead have seen their oil production decline in recent months, most notably Nigeria and Venezuela. It also means that what those oil exporters who are not at capacity will say, will be identical to Iran's statement: oil freeze is a go... as long as they are not bound to it.
Translation: no oil production freeze.
Meanwhile, headline scanning algos continue to push crude higher on every incremental, and targeted, headline meant to achieve nothing more than force headline scanning algos to trip momentum ignition circuits, hit stops and force even more short covering. Rinse. Repeat.
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