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Iran maintains positive stance on output cuts extension

30 Apr 2017 11:52 (+01:00 GMT)
Iran maintains positive stance on output cuts extension

Dubai, 30 April (Argus) — Iran's oil minister Bijan Namdar Zanganeh has continued to talk up the chances for an extension of the agreements to cut global production beyond the first half of this year, saying that signs from the countries participating in the cuts have been "positive."

Zanganeh made similar comments earlier in the month, expressing his view that the agreements by Opec and 11 non-Opec countries to scale back production by close to 1.8mn b/d in the first half of this year have had a positive impact on the market thus far.

But ahead of the coming ministerial Opec meeting in Vienna on 25 May — where a decision on the extension is set to be taken — Zanganeh pointed to the growing number of participating countries that have thrown their support behind the idea of an extension.

"In recent days, we have received positive signals from both Opec member and non-member countries with respect to an extension of this six-month agreement into the second half of 2017," Zanganeh said in Tehran.

Comments from Saudi Arabia's energy minister Khalid al-Falih in the middle of April that consensus for an extension is building were followed up with statements of support for the move from the Algerian, Angolan, Venezuelan, and Azeri ministers last week.

Kuwait's oil minister Issam al-Marzouq has said consensus has already been achieved among the six Gulf Cooperation Council (GCC) countries, all of which are signatories to the agreements.

"If Opec's principal members support an extension of these agreements, Iran will — as it has in the past — go along with other Opec members," Zanganeh said.

In signing on to the agreements, Iran pledged to cap its crude oil production at 3.797mn b/d over the six-month period on average – around 90,000 b/d above the level it was deemed to be producing at the time of signing.

Iran's current crude output is "close to 3.8mn b/d, according to secondary sources," Zanganeh said, which proves that Iran "has complied [with its pledge] during the agreed [six-month] timeframe of the Opec agreement," he said.

Zanganeh in March ( said for the first time that Iran would be prepared to hold its production at the agreed 3.8mn b/d for the second half of the year, on the condition that other participating countries also stick to the agreed levels.