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.
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

Germany Celebrates 25 Years of Unity

October 3 is a public holiday, marking the day in 1990 when East Germany and West Germany reunited More

Analysts: Russia's Syria Strikes Shake Regional Powers

If Moscow bolsters Assad, Saudi Arabia, other Gulf countries may feel obliged to step in More

Video Innovative Nano-Tech Water Filter Prevents Disease

It can absorb contaminants like copper, bacteria, viruses and pesticides, says Askwar Hilonga, who has been successfully trying out his product in Arusha More

This forum has been closed.
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.
Russia’s Syria Involvement Raising Concerns in Europei
Luis Ramirez
October 02, 2015 4:45 PM
European nations are joining the United States in demanding that Russia stop targeting opposition groups other than the Islamic State militants as Russian warplanes continue to conduct raids in Syria. The demand came in a statement from Britain, France, Germany, Qatar, Saudi Arabia, Turkey and the United States Friday. VOA Europe correspondent Luis Ramirez reports.

Video Russia’s Syria Involvement Raising Concerns in Europe

European nations are joining the United States in demanding that Russia stop targeting opposition groups other than the Islamic State militants as Russian warplanes continue to conduct raids in Syria. The demand came in a statement from Britain, France, Germany, Qatar, Saudi Arabia, Turkey and the United States Friday. VOA Europe correspondent Luis Ramirez reports.

Video First Self-Driving Truck Debuts on European Highways

The first automated semi-trailer truck started its maiden voyage Friday, Oct. 2, on a European highway. The Daimler truck called 'Actros' is the first potentially mass-produced truck whose driver will be required only to monitor the situation, similar to the role of an airline captain while the plane is in autopilot mode. VOA’s George Putic reports.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Migrant Influx Costs Europe, But Economy Could Benefit

The influx of hundreds of thousands of refugees and migrants is testing Europe’s ability to respond – especially in the poorer Balkan states. But some analysts argue that Europe will benefit by welcoming the huge numbers of young people – many of them well educated and willing to work. Henry Ridgwell reports from London.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

Video New Fabric Helps Fight Dust-Related Allergies

Many people around the world suffer from dust-related allergies, caused mainly by tiny mites that live in bed linen. Polish scientists report they have successfully tested a fabric that is impenetrable to the microscopic creatures. VOA’s George Putic has more.

Video Burkina Faso's Economy Deeply Affected by Political Turmoil

Political turmoil in Burkina Faso over the past year has taken a toll on the economy. The transitional government is reporting nearly $70 million in losses in the ten days that followed a short-lived coup by members of the presidential guard earlier this month. The crisis shut businesses and workers went on strike. With elections on the horizon, Emilie Iob reports on what a return to political stability can do for the country's economic recovery.

Video Fleeing Violence, Some Syrians Find Refuge in Irbil

As Syrians continue to flee their country’s unrest to seek new lives in safer places, VOA Persian Service reporter Shepol Abbassi visited Irbil, where a number Syrians have taken refuge. During the religious holidy of Eid al-Adha, the city largely shut down, as temperatures soared. Amy Katz narrates his report.

Video Nigeria’s Wecyclers Work for Reusable Future in Lagos

The streets and lagoons of Africa's largest city - Lagos, Nigeria - are often clogged with trash, almost none of which gets recycled. One company is trying to change that. Chris Stein reports for VOA from Lagos.

Video Sketch Artist Helps Catch Criminals, Gives a Face to Deceased

Police often face the problem of trying to find a crime suspect based on general descriptions that could fit hundreds of people in the vicinity of the crime. In these cases, an artist can use information from witnesses to sketch a likeness that police can show the public via newspapers and television. But, as VOA’s Greg Flakus reports from Houston, such sketches can also help bring back faces of the dead.

Video Thailand Set to Build China-like Internet Firewall

Thai authorities are planning to tighten control over the Internet, creating a single international access point so they can better monitor content. VOA Correspondent Steve Herman reports from Bangkok on what is being called Thailand’s own "Great Firewall."

Video Croatian Town’s War History Evokes Empathy for Migrants

As thousands of Afghanistan, Iraqi and Syrian migrants pass through Croatia, locals are reminded of their own experiences with war and refugees in the 1990s. VOA's Daniel Schearf reports from the town of Vukovar, where wartime scars still are visible today.

Video Long Drought Affecting California’s Sequoias

California is suffering under a historic four-year drought and scientists say even the state's famed sequoia trees are feeling the pain. The National Park Service has started detailed research to see how it can help the oldest living things on earth survive. VOA’s George Putic reports.

VOA Blogs

World Currencies


Rates may not be current.