News / Economy

    Iran, Iraq Warn OPEC of Big Oil Increases

    Iranian Oil Minister Bijan Zanganeh is surrounded by journalists and security staff as he arrives at his hotel ahead of an OPEC meeting in Vienna, Dec. 3, 2013.
    Iranian Oil Minister Bijan Zanganeh is surrounded by journalists and security staff as he arrives at his hotel ahead of an OPEC meeting in Vienna, Dec. 3, 2013.
    Reuters
    Iran and Iraq on Tuesday put OPEC on notice of substantial oil output increases to come, saying others in the producer cartel will need to give way to make room for them.

    Speaking ahead of an OPEC meeting, oil ministers for the two countries - rivals as the group's second and third biggest producers after Saudi Arabia - said they were targeting 4 million barrels per day [bpd], growth of about one million bpd apiece.

    Neither country can expect to reach those goals any time soon, but both are keen to prepare the ground for special treatment should the Organization of the Petroleum Exporting Countries need next year to negotiate a deal to curb supplies to keep oil prices above its favored $100 a barrel.

    Neither can raise output quickly enough to make waves at Wednesday's OPEC meeting - ministers confidently predict no change in the group's production cap of 30 million bpd.

    “This looks like jockeying for position ahead of a potential need for a need for a structured output agreement in 2014,” said Bill Farren-Price of consultancy Petroleum Policy Intelligence.

    A senior Gulf delegate said next June's meeting might require OPEC to consider supply cuts. More oil from Iran and Iraq, a recovery in output from fellow OPEC member Libya and fast-rising U.S. shale oil could tip the balance.

    “Maybe we'll talk about cuts in six months from now,” he said.

    Iranian Oil Minister Bijan Zanganeh said Iran will take six months after sanctions are lifted to return to full oil output capacity of 4 million bpd.

    Zanganeh was reappointed by Iran's new reformist President Hassan Rouhani and will be responsible for rebuilding Iran's oil industry should Washington and Brussels lift sanctions in six months as part of a deal on Iran's nuclear program.

    “In Zanganeh's favor, he's the one oil minister in Iran's post-revolutionary period to have a positive impact on increasing production capacity and took it above 4 million for a period of time. He has form,” said Farren-Price.

    Iranian oilfields had not suffered technically as a result of the sanctions which have seen Iranian oil output fall by a million barrels per day to less than three million bpd, Zanganeh said.

    Asked whether he expected others in OPEC to make room for Iran's return, Zanganeh said: “This is the tradition. When a member country after some difficulties returns to the market, other members accept to make room for them.”

    “The member countries who produced more during the past years. I think they will understand they should make room for Iran,” he said.

    Both Saudi Arabia and Iraq have raised output in the past two years since sanctions were imposed on Tehran, but Baghdad will argue that it should be a special case given many years lost to sanctions and war under former President Saddam Hussein.

    Cautious Iran budget

    Zanganeh said he hoped Iran would lift exports in 2014 from current levels of around 1.2 million bpd.

    But Tehran is not betting on making much headway next year.

    Rouhani's first draft budget for 2014 estimates oil exports at 1.1 million bpd, Iranian oil ministry website Shana said, indicating Tehran sees no major recovery in sales next year.

    Rouhani is scheduled to present the draft budget for the next Iranian year - beginning March 21 - to parliament on Wednesday.

    Iraq reckons it can hit four million bpd next year in what would be the country's biggest annual oil supply increase since the fall of Saddam a decade ago.

    Iraqi Oil Minister Abdul Kareem Luaibi said Baghdad planned to lift exports to 3.4 million barrels daily, including 400,000 bpd from the semi-autonomous Kurdistan regional government KRG).

    With domestic consumption running at about 700,000 bpd that would take total Iraqi supply above 4 million bpd, up from just below three million bpd now.

    That scale of such a production increase would raise the pressure on others in OPEC, chiefly Saudi Arabia, to curb supply to prevent oil prices falling.

    But industry experts and oil company executives working on Iraqi oilfield development say a four million bpd output target looks very optimistic for next year because of infrastructure constraints and security issues.

    “Those Iraqi estimates are over optimistic. I don't think their production can hit that,” said Cuneyt Kazokoglu of energy consultancy FGE. “Neither can KRG exports hit 400,000 bpd. If they really push it perhaps they could do 300,000 bpd.”

    “Iraq has serially failed to meet its expansion targets in recent years and this latest pronouncement stretches credibility,” said Farren-Price.

    You May Like

    Hope Remains for Rio Olympic Games

    Facing a host of problems, Rio prepares for holding the games but experts say some risks, like Zika, may not be as grave as initially thought

    IS Use of Social Media to Recruit, Radicalize Still a Top Threat to US

    Despite military gains against IS in Iraq and Syria, their internet propaganda still commands an audience; US officials see 'the most complex challenge that the federal government and industry face'

    ‘Time Is Now’ to Save Africa’s Animals From Poachers, Activist Says

    During Zimbabwe visit, African Wildlife Foundation President Kaddu Sebunya says poaching hurts Africa as slave trade once did

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Ivorian Chocolate Makers Promote Locally-made Chocolatei
    X
    July 29, 2016 4:02 PM
    Ivory Coast is the world's top producer of cocoa but hardly any of it is processed into chocolate there. Instead, the cocoa is sent abroad to chocolate makers in Europe and elsewhere. This is a general problem throughout Africa – massive exports of raw materials but few finished goods. As Emilie Iob reports from Abidjan, several Ivorian entrepreneurs are working to change that formula - 100 percent Ivorian chocolate bar at a time.
    Video

    Video Ivorian Chocolate Makers Promote Locally-made Chocolate

    Ivory Coast is the world's top producer of cocoa but hardly any of it is processed into chocolate there. Instead, the cocoa is sent abroad to chocolate makers in Europe and elsewhere. This is a general problem throughout Africa – massive exports of raw materials but few finished goods. As Emilie Iob reports from Abidjan, several Ivorian entrepreneurs are working to change that formula - 100 percent Ivorian chocolate bar at a time.
    Video

    Video Tesla Opens Battery-Producing Gigafactory

    Two years after starting to produce electric cars, U.S. car maker Tesla Motors has opened the first part of its huge battery manufacturing plant, which will eventually cover more than a square kilometer. Situated close to Reno, Nevada, the so-called Gigafactory will eventually produce more lithium-ion batteries than were made worldwide in 2013. VOA's George Putic reports.
    Video

    Video Polio-affected Afghan Student Fulfilling Her Dreams in America

    Afghanistan is one of only two countries in the world where children still get infected by polio. The other is Pakistan. Mahbooba Akhtarzada who is from Afghanistan, was disabled by polio, but has managed to overcome the obstacles caused by this crippling disease. VOA's Zheela Nasari caught up with Akhtarzada and brings us this report narrated by Bronwyn Benito.
    Video

    Video Hillary Clinton Promises to Build a 'Better Tomorrow'

    Democratic presidential candidate Hillary Clinton urged voters Thursday not to give in to the politics of fear. She vowed to unite the country and move it forward if elected in November. Clinton formally accepted the Democratic Party's nomination at its national convention in Philadelphia. VOA national correspondent Jim Malone has more.
    Video

    Video Trump Tones Down Praise for Russia

    Republican presidential candidate Donald Trump is toning down his compliments for Russia and Vladimir Putin as such rhetoric got him in trouble recently. After calling on Russia to find 30.000 missing emails from rival Hillary Clinton, Trump told reporters he doesn't know Putin and never called him a great leader, just one who's better than President Barack Obama. Putin has welcomed Trump's overtures, but, as Zlatica Hoke reports, ordinary Russians say they are not putting much faith in Trump.
    Video

    Video Uganda Unveils its First Solar-powered Bus

    A solar-powered bus described by its Ugandan makers as the first in Africa has made its public debut. Kiira Motors' electric bus, Kayoola, displayed recently at a stadium in Uganda's capital. From Kampala, Maurice Magorane filed this report narrated by Salem Solomon.
    Video

    Video Silicon Valley: More Than A Place, It's a Culture

    Silicon Valley is a technology powerhouse and a place that companies such as Google, Facebook and Apple call home. It is a region in northern California that stretches from San Francisco to San Jose. But, more than that, it's known for its startup culture. VOA's Elizabeth Lee went inside one company to find out what it's like to work in a startup.
    Video

    Video Immigrant Delegate Marvels at Democratic Process

    It’s been a bitter and divisive election season – but first time Indian-American delegate Dr. Shashi Gupta headed to the Democratic National Convention with a sense of hope. VOA’s Katherine Gypson followed this immigrant with the love of U.S. politics all the way to Philadelphia.
    Video

    Video Dutch Entrepreneurs Turn Rainwater Into Beer

    June has been recorded as one of the wettest months in more than a century in many parts of Europe. To a group of entrepreneurs in Amsterdam the rain came as a blessing, as they used the extra water to brew beer. Serginho Roosblad has more to the story.
    Video

    Video Commerce Thrives on US-Mexico Border

    At the Democratic Convention in Philadelphia this week, the party’s presumptive presidential nominee, Hillary Clinton, is expected to attack proposals made by her opponent, Republican presidential nominee Donald Trump, to build a wall along the U.S.-Mexico border. Last Friday, President Barack Obama hosted his Mexican counterpart, President Enrique Peña Nieto, to underscore the good relations between the two countries. VOA’s Greg Flakus reports from Tucson.
    Video

    Video Film Helps Save Ethiopian Children Thought to be Cursed

    'Omo Child' looks at effort of African man to stop killings of ‘mingi’ children
    Video

    Video London’s Financial Crown at Risk as Rivals Eye Brexit Opportunities

    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.8998
    JPY
    USD
    103.32
    GBP
    USD
    0.7594
    CAD
    USD
    1.3176
    INR
    USD
    66.954

    Rates may not be current.