Iran was willing to freeze oil production after reaching 4 million barrels a day

Iran was willing to freeze oil production after reaching 4 million barrels a day

TEHRAN, March 14. Iran is ready to join the decision to stabilize the oil production after production out of it desanctions on the level of 4 million barrels per day, told reporters energy Minister Alexander Novak after talks in Iran.

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Experts: freezing of oil production will affect Iran and Iraq, not Russia and Saudi Arabia

“Iran is in a special situation, because the sanctions imposed are substantially reduced production volumes in the country, and, of course, the same approach would be not quite fair in relation to Iran. Minister of Iran supports the coordination of actions between the countries-exporters, including the possible freeze. Iran’s position is to restore your volumes that are allocated under the OPEC quota prior to the imposition of sanctions, and then ready to join the frozen production with other countries. I think that this approach is quite reasonable, and the doors are open for Iran, given that Iran supported its overall approach for the common freezing,” he said.

The Minister stressed that at the present time, public consent to the stabilization of oil production agreed exporting countries, producing approximately 73-75% of the oil. “I think Iran can join us with time, and Iran it also does not exclude, generally supporting the appropriateness of such coordination. I believe that the agreement can work,” added Novak. He said that it was not discussed when Iran will reach the production of 4 million barrels per day.

Oil prices show stabilization of production

Dynamics of prices for oil in February confirms that countries stick to their verbal agreements on the stabilization of oil production, told reporters energy Minister Alexander Novak.

“February is over and we see the dynamics of the February to January, and it confirms that those countries who have gathered in Doha to support their oral agreement,” he said.

“I think when we see a price increase from $27 to $40, this positive price January,” the Minister added. Novak noted that in 2016 we can expect the price of oil between $40 to $50 per barrel. “It is difficult to predict. I’m talking about averages over the long-term price performance. From the fall no one is safe. Speculators may heat up the market. Taking into account the depreciation of investments it is important to understand that the price of oil, which actively returned the investments in such complex projects as shale oil. Proceeding from today’s position of shale oil, it’s roughly around $50 on average. We’re talking about a certain average, because there is the production volume high,” he said.

The meeting of the countries-manufacturers of oil can be held in April

The meeting of the countries-manufacturers of oil can be held in April, date to be agreed in the coming days, considers several options of venues, said Novak.

“Now discusses different dates, most likely, the meeting will be in April, but the date specific in the coming days to be agreed. The meeting place is discussed, and such consultations are OPEC countries, mainly Qatar, the President of OPEC. Doha is considered as an option for meetings,” he said.

Earlier it was reported that a meeting can be held 20-25 March in Moscow, also discusses other venue.

The agreement on stabilization of oil production

Countries-manufacturers of oil can sign an agreement on stabilization of oil production, the absence of a decision would lead to greater volatility in the market, said Minister of energy of the Russian Federation.

“In my opinion, the market is more balanced today by price, including through a clear understanding of production in accordance with agreements between the two countries. If not to secure a decision, there will be uncertainty in the market, and this will lead to greater volatility. Now, alternatively, considered that it might be signed a certain document, and perhaps a General statement countries. From my point of view, should be signed agreement or Memorandum or a public joint statement,” said Novak journalists.

The Minister added that at present there is no clear mechanism of monitoring compliance with the agreements except the actual statistics of production of the countries, which publicly exposed.

In mid-February of the current year in the Qatari capital Doha, Ministers of oil of Saudi Arabia, Qatar, Venezuela, included in OPEC and Russian energy Minister Alexander Novak held talks on improving the price situation on the oil market.

The parties expressed their willingness to save, on average, in 2016 oil production at the level of January of the current year, if other countries-oil producers will join this initiative. On 17 February in Tehran passed negotiations of Ministers of oil of Iran, Venezuela, Iraq and Qatar, which, in turn, discussed the possibility of “freezing” the level of oil production. Following the talks, the Iranian oil Minister Bijan Namdar Zanganeh said that Iran would support any initiative to improve the situation with oil prices. Recently Zanganeh said that Iran will discuss with the largest oil producers freeze their prey only when its level in the country will reach 4 million barrels a day.

Iranian officials have repeatedly stated that they do not intend to be subjected to sanctions after having left from under them. By April of the current year in the Islamic Republic plans to increase oil production from 2.8 million barrels to 3.6 million barrels per day versus last year. By the end of March 2016 Iran is expected that the exporting country of oil will reach 2 million barrels per day.

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From high to collapse: the dynamics of oil prices since 2000