Iran believes that global agreements about the freezing of oil production level will not be enough to raise prices because the market is now dominated by oversupply, sources told Reuters at the Iranian oil industry of Iran.
“The problem of the oil market is a glut. Need to do something to get rid of those extra barrels,” said one of the interlocutors of the Agency, familiar with the position of the Iranian authorities. He added that “freeze on the part of those who extract the maximum, will not help the market.”
A second source said that the idea of agreement should be discussed further, but when “countries that have increased production (mainly Saudi Arabia), will reduce it, and Iran will be released on desanctions level.”
On Tuesday Russia, Saudi Arabia, Qatar, and Venezuela has announced its willingness to freeze oil production at the January level, to curb the glut in the market and raise prices. On Wednesday in Tehran OPEC representatives held talks with Iran and Iraq, hoping to convince them to join the agreement.
Iran during the talks, insisted that he needed to regain markets lost during the time when he was under sanctions, and that his actions will not significantly impact on the oversupply of oil. During the year, Tehran intends to increase exports to 1 million barrels.a day.
The Minister of oil of Iran Bijan Zanganeh at the end of the negotiations was expressed very cautiously, saying that his country supports the initiative on freezing of production as a first step to a balanced market and price recovery.
Saudi Arabia and Russia, the largest oil exporters in the world, said that to balance the market will be possible only if all major oil producing countries will join the agreement. Reuters notes that this initiative is not yet much impressed with the market, the price of which during the week, experienced strong fluctuations.
On Thursday, Brent crude stands on a London electronic exchange ICE in the neighborhood of $35/bbl. with fluctuations in the range of $34,35 $35,44 per barrel.