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

Turkey's Controversial Reform Bill Giving Investors Jitters

Homeland security reform bill will give police new powers in search, seizure, detention and arrests, while restricting the rights of suspects, their attorneys More

Audio Slideshow In Kenyan Prison, Good Grades Are Path to Freedom

Some inmates who get high marks could see their sentences commuted to non-custodial status More

'Rumble in the Jungle' Turns 40

'The Champ' knocked Foreman out to regain crown he had lost 7 years earlier when US government accused him of draft-dodging and boxing officials revoked his license 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.
Victorious Secularists Face Challenge to Form Government in Tunisiai
X
Henry Ridgwell
October 30, 2014 11:39 PM
Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Victorious Secularists Face Challenge to Form Government in Tunisia

Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Africa Tells its Story Through Fashion

In Africa, Fashion Week is a riot of colors, shapes, patterns and fabrics - against the backdrop of its ongoing struggle between nature and its fast-growing urban edge. How do these ideas translate into needle and thread? VOA’s Anita Powell visited this year’s Mercedes Benz Fashion Week Africa in Johannesburg to find out.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.

All About America

AppleAndroid

World Currencies

EUR
USD
0.7893
JPY
USD
107.68
GBP
USD
0.6238
CAD
USD
1.1214
INR
USD
61.185

Rates may not be current.