Iran says OPEC considering deeper output cuts, delegates sceptical
- Author: Zachary Reyes Jun 22, 2017,
Jun 22, 2017, 3:56
"They (US producers) have added more than 900,000 barrels to their daily output in the last few months, which was bigger than OPEC forecasts", Zanganeh said on the sidelines of a Cabinet meeting in Tehran on Wednesday, Shana reported.
"We are consulting with OPEC member states to have them prepared to make a decision, " Zanganeh said. Prices for both benchmarks are down around 14 percent since late May, when producers led by the Organization of the Petroleum Exporting Countries extended a pledge to cut output by 1.8 million barrels per day (bpd) for an extra nine months.
OPEC and 12 non-OPEC members agreed in November 2016 to cut oil output by 1.8 mb/d in 1H17.
The decrease in oil price came while OPEC's compliance with the deal is about 106 percent, though Libya and Nigeria, which are exempt from the oil cut deal, increased output by 350,000 b/d in May, and their production is increasing now.
The Iranian minister personally believes that OPEC needs to "wait a while and see how the market will form".
The oil minister further said that the Islamic Republic is in talks with other OPEC members for a decision on the issue.
OPEC in a meeting in May agreed to extend until March 2018 an oil output cut deal that was sealed past year to help shore up prices.
Some members "believe that it's not [been] long since OPEC chose to cut production, and the impact of this decision has not practically kicked in in the market yet", he added.
The deal calls on OPEC to cut 1.2 million b/d and 10 major non-OPEC countries, led by Russian Federation, to cut a collective 558,000 b/d.
Compliance with the cuts remains high - in fact it was at its highest in May since the deal began, according to an OPEC source who spoke on condition of anonymity.
Oil producers are struggling to shore up markets after a global supply glut led prices to fall below $50 a barrel this week. OPEC compliance with the curbs was 108% non-OPEC compliance was 100% in May, according to a source familiar with the matter, Reuters reported Tuesday.