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

US Firms Concerned About China's New Cyber Regulations

New rules would require technology companies doing business in financial sector to hand over their source code, adopt Chinese encryption algorithms More

WHO Focus on Ebola Shifts to Ending Outbreak

Focus to be less on building facilities and more on efforts to find infected people, manage their cases, engage with communities and ensure proper burials More

US Scientist Who Conceived of Groundbreaking Laser Technology Dies

Charles Townes, Nobel laureate, laser co-creator paved way for other scientific discoveries: CDs, eye surgery, metal cutters to name a few technologies that rely on lasers More

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.
Super Bowl Ads Compete for Eyes on TV, Webi
X
January 29, 2015 9:58 AM
Super Bowl Sunday (Feb. 1) is about more than just the NFL's American football championship and big parties to watch the game. Viewers also tune in for the world famous commercials that send Facebook and Twitter abuzz. Daniela Schrier reports on the social media rewards for America’s priciest advertising.
Video

Video Super Bowl Ads Compete for Eyes on TV, Web

Super Bowl Sunday (Feb. 1) is about more than just the NFL's American football championship and big parties to watch the game. Viewers also tune in for the world famous commercials that send Facebook and Twitter abuzz. Daniela Schrier reports on the social media rewards for America’s priciest advertising.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Freedom on Decline Worldwide, Report Says

The state of global freedom declined for the ninth consecutive year in 2014, according to global watchdog Freedom House's annual report released Wednesday. VOA's William Gallo has more.
Video

Video As Ground Shifts, Obama Reviews Middle East Strategy

The death of Saudi Arabia’s king, the collapse of a U.S.-friendly government in Yemen and a problematic relationship with Israel’s leadership are presenting a new set of complications for the Obama administration and its Middle East policy. Not only is the U.S. leader dealing with adversaries in Iran, the Islamic State and al-Qaida, but he is now juggling trouble with traditional allies, as White House correspondent Luis Ramirez reports.
Video

Video MRI Seems to Help Diagnose Prostate Cancer, Preliminary Study Shows

Just as with mammography used to detect breast cancer, there's a lot of controversy about tests used to diagnose prostate cancer. Fortunately, a new study shows doctors may now have a more reliable way to diagnose prostate cancer for high risk patients. More from VOA's Carol Pearson.
Video

Video Smartphones About to Make Leap, Carry Basic Senses

Long-distance communication contains mostly sounds and pictures - for now. But scientists in Britain say they are close to creating additions for our smartphones that will make it possible to send taste, smell and even a basic touch. VOA’s George Putic reports.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.
Video

Video Saved By a Mistake - an Auschwitz Survivor's Story

Dagmar Lieblova was 14 when she arrived at Auschwitz in December 1943, along with her entire Czech Jewish family. All of them were to die there, but she was able to leave after several months due to a bureaucratic mix-up which saved her life. Now 85, with three children and six grandchildren, she says she has a feeling of victory. This report by Ahmad Wadiei and Farin Assemi, of RFE/RL's Radio Farda is narrated by RFE’s Raymond Furlong.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid

World Currencies

EUR
USD
0.8815
JPY
USD
117.85
GBP
USD
0.6581
CAD
USD
1.2420
INR
USD
61.404

Rates may not be current.