Russia failed to persuade Iran to cut oil production

Iran can increase oil production in the framework of the agreements of the largest producers aimed at stabilizing the market, said Novak after talks with the Minister of oil of Iran Bijan Namdar Zanganeh in Tehran, reports “Interfax”, which refers to Iranian news Agency Shana.

“The largest oil producers must be coordinated with each other. However, as Iran reduced oil production during the sanctions, we fully understand Iran’s desire to increase production and to restore its share in the world market”, — said the Russian Minister.

In mid-February, Russia and three countries in OPEC — Saudi Arabia, Venezuela, and Qatar — agreed to freeze oil production at the level of January, if the agreement will join other major exporters. Later, Novak said that the agreement is ready to join in 15 countries — oil producers, who account for about 73% of oil exports in the world. Implementation of these agreements would reduce the overproduction of oil in the world 1.3 million barrels. a day (when overproduction, which, according to OPEC, is 1.8 million barrels. a day), he said.

But Iran, one of the largest producer among the OPEC countries, flatly refused to accede to the agreement: international sanctions against the Islamic Republic that were removed only from the beginning of 2016, and it intends to regain its position in the market. Currently, Iran exports more than 1.4 million barrels. in a day and for three months is going to increase this figure to 2 million barrels.

Moreover, sources Reuters reported that due to the tough stance of Iran, the meeting that should be fixed in the agreement to freeze production may not take place, and the arrangement under threat. Novak went to Tehran on Monday, just to convince Iranian counterparts, said a source in the Ministry on the eve of his trip.

“Through the work of the largest oil producers (OPEC and non-OPEC) Iran could have an exclusive way to increase production,” said Novak following the meeting. He added that the agreement to freeze production can work without Iran.

Oil prices did not react to the statements of the Russian Minister, continued to decline on Monday. According to 17:40 Moscow time, Brent oil on ICE cost $39,16 — on 3,14% less than on Friday.

The Novak initially did not have a chance to negotiate with Iran — the country’s position was clear in advance, says the partner of consulting company RusEnergy Mikhail Krutikhin: Iran wants to restore its desanctions the volume of oil exports. Prey they freeze not promised and declared it everywhere. Influence the future of negotiations to freeze the production in March or April, it can not in any way, because any agreements between the major oil producers has not yet been reached, he adds.