Iran’s current crude oil output level will not be reduced under the extension of the OPEC production cuts, Iranian Oil Minister Bijan Zanganeh was quoted as saying on Thursday.
“Iran’s oil output would stand at 3.8 mb/d,” Zanganeh said in Vienna – as quoted by Trend news agency - where OPEC meets to discuss the details of the output cut extension.
OPEC agreed to extend the current cuts for nine months until March 2018 in what was a widely expected decision that sent oil prices plunging as investors hoped for more.
In the initial OPEC deal, Iran was allowed to slightly raise output and keep it capped at 3.797 million bpd. Four months into the deal in which all others – except for exempt Libya and Nigeria – had to cut, the Islamic Republic has been sticking to that production ceiling, OPEC secondary-sources data show.
But Iran, which had argued exemption in the initial deal with the need to return to pre-sanction levels of production, wants to increase its output to 5 million bpd by 2021.
Speaking to Iran’s oil ministry’s news service Shana the day before the OPEC meeting, Zanganeh said, when asked if Iran would cut its crude oil production:
“Iran will not reduce its output.” Related: Does The U.S. Still Need A Strategic Petroleum Reserve?
Also on Wednesday, having touched down in Vienna for the OPEC meet, Zanganeh told CNBC that both a six-month and a nine-month extension would be acceptable for Iran, but dodged a direct answer to the question, Would Tehran agree to cut, if asked?
A day before the decisive meeting, the cartel members were still debating how long the extension would be, Zanganeh said, suggesting that not all oil producers were on board with the Saudi-Russian proposal for a nine-month extension.
With oil prices plummeting 4 percent at 12:33pm EDT on Thursday, with WTI breaking below $50, it looks like a nine-month extension at current production levels is not enough to convince the market.
By Tsvetana Paraskova for Oilprice.com
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