Accessibility links

Breaking News

Iran Wants New Oil Output Cut, Price of $70-100

TEHRAN (Reuters) -- Iran wants OPEC to cut oil output by a further 1 to 1.5 million barrels per day (bpd) when it meets in Cairo later this month, the Islamic Republic's representative to the cartel was quoted as saying on November 15.

Iran's OPEC governor Mohammad Ali Khatibi also said talks were underway on cooperation with crude producers outside OPEC to reduce output, after the oil price fell by more than 60 percent from a peak of around $147 per barrel in July.

He told state television that members of the Organisation of the Petroleum Exporting Countries (OPEC), supplier of more than a third of the world's oil, needed a price of at least $70-100.

The market remained oversupplied, despite a move by OPEC to reduce production by 1.5 million bpd last month, he said.

"This is the minimum price that we believe should exist," he said in a live interview. "If prices are lower we believe the global oil industry chain will be faced with problems."

The oil price has tumbled in recent months as the global economic crisis hit demand in big consumer nations, with U.S. crude falling $1.20 to $57.04 on November 14.

OPEC countries, expected to meet in the Egyptian capital on November 29, are calling for action to halt oil's slide as they face reduced revenues and a struggle to finance domestic projects.

The website of state broadcaster IRIB said Iran, the world's fourth-largest oil producer and seen as a price hawk, would propose that OPEC reduce its output again at the meeting in two weeks' time.

"It is better that, at the meeting in Cairo, it (OPEC) decides to cut output by another 1 to 1.5 million barrels so that there is ... balance between production and demand," IRIB quoted Khatibi as saying.

October Move 'Not Enough'

He said that cooperation of non-OPEC countries was needed for market stability as they pump out about 50 million bpd.

"Now there are negotiations that non-OPEC countries cooperate with OPEC to lower output to some extent because if they don't...or if they increase output, they have neutralised OPEC's action," Khatibi said on state television.

"We believe they will also incur losses from the drop in oil prices. Therefore it is necessary that they will also cooperate and lower their output," he said.

Russia, struggling with a stock market crisis that has drained cash reserves built up in the oil price boom, is the biggest oil producer outside the 13-member OPEC.

OPEC agreed in October to reduce supplies by 1.5 million bpd, or about 5 percent, from November 1 but that measure has failed to stop oil prices declining.

"The 1.5 million barrels per day cut has not been enough and there needs to be another cut so that OPEC's move is completed," Khatibi said.

Asked whether he believed all OPEC members would be able to implement commitments to reduce output, Khatibi told IRIB.

"Because of the rise of global crude prices in the last 2 to 3 years, OPEC member countries have good money reserves and they can cut their production for a while."

"The falling trend of oil prices and the rise in the [oil] storage of big industrial countries shows that there is oversupply," Khatibi said.