OPEC has no immediate plan to cut its output target amid the collapse in oil prices, and Iran isn’t calling for the group to hold an emergency meeting, Iranian Oil Minister Bijan Namdar Zanganeh said.
Iran is instead consulting with its fellow OPEC members to respond to the price slump, Zanganeh told reporters today at a conference in Tehran, without providing more details. Brent crude has tumbled 31 percent since the Organization of Petroleum Exporting Countries decided on Nov. 27 to keep its production ceiling unchanged at 30 million barrels a day.
“As yet, no decision has been made to adopt a lower production ceiling,” he said. Upheaval in oil markets is the result of politics and decisions by producer countries, Zanganeh said, declining to be more specific.
Iran together with Venezuela has called for OPEC, which supplies about 40 percent the world’s oil, to work together to support a recovery in crude. The U.S. shale boom has contributed to a global glut, and Qatar and the United Arab Emirates estimate the oversupply at about 2 million barrels a day. Iran is hobbled by international sanctions over its nuclear program and struggling for market share.
Brent crude, a benchmark for more than half of the world’s oil, has slid 13 percent this month and was trading below $50 a barrel in London. Oil fell almost 50 percent last year, the most since the 2008 financial crisis.
U.A.E. Energy Minister Suhail Al-Mazrouei said in Abu Dhabi today that sustainable development in the oil industry cannot be achieved at current prices.
Iran is lowering the crude price assumed for this year’s budget to $40 a barrel, from $72, the state-run Fars News Agency reported Finance and Economy Minister Ali Tayebnia as saying Jan. 15. The Persian Gulf nation pumped 2.77 million barrels a day of oil in December, down from an average of 3.58 million in 2011, according to data compiled by Bloomberg.
OPEC members and non-OPEC producers must cooperate “to generate investment in the oil industry,” Zanganeh said. “This will bring about desired conditions for both producers and consumers.”