Iran says roll over of Opec+ cuts not enough

A straight roll over of the Opec and non-Opec production cuts beyond March 2020 will not be enough to achieve the stated goal of market balance, Iran's oil minister Bijan Namdar Zanganeh said today.

Opec ministers meet later today to discuss what action, if any, needs to be taken beyond the current deal's expiry at the end of March. A further cut, or greater compliance with the existing deal, are both on the table.

"It is all about demand and supply," Zanganeh said. "We now see that in the first and second quarters of next year we will have oversupply in the market." This, Zanganeh said, will put pressure on prices.

"If we get 100pc compliance by all countries to the current agreement, that will be good," he said. "It will be a success… but it will not be enough."

Should Opec and its non-Opec allies, known collectively as Opec+, agree on a deeper cut at their ministerial meetings today and tomorrow, "this will be an even bigger success," Zanganeh said.

Oil inventories remain above long-term averages, with commercial OECD stocks 21mn bl above the five-year average at the end of September, IEA data show. Should Opec maintain production at the present level, inventories would rise by 350mn bl next year.

Zanganeh said Iran will support whichever proposal receives the majority support in the Opec meeting today and the Opec+ meeting tomorrow.

By Nader Itayim