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Iran says it is 'illogical' for it to join oil output freeze | Iran says it is 'illogical' for it to join oil output freeze |
(35 minutes later) | |
Iran's Opec envoy is reported as saying it is "illogical" for it to join the oil output freeze agreed by a Russian and Saudi Arabian-led group on Tuesday. | Iran's Opec envoy is reported as saying it is "illogical" for it to join the oil output freeze agreed by a Russian and Saudi Arabian-led group on Tuesday. |
Mehdi Asali, quoted in the Iranian newspaper, Shargh, said Iran will continue to increase oil production until it reaches pre-sanction levels. | Mehdi Asali, quoted in the Iranian newspaper, Shargh, said Iran will continue to increase oil production until it reaches pre-sanction levels. |
Venezuela's oil minister is due to hold talks in Tehran to broker a deal with Iran and Iraq on Wednesday. | Venezuela's oil minister is due to hold talks in Tehran to broker a deal with Iran and Iraq on Wednesday. |
Iran has only just restarted oil exports after sanctions were lifted. | Iran has only just restarted oil exports after sanctions were lifted. |
The move by four countries, including Venezuela and Qatar, is the first of its kind in 15 years. | The move by four countries, including Venezuela and Qatar, is the first of its kind in 15 years. |
It is designed to reflate oil prices, which have sunk by about 70% from their recent peak of $116 in June 2014. | It is designed to reflate oil prices, which have sunk by about 70% from their recent peak of $116 in June 2014. |
The plan though failed to convince oil traders. In Tuesday trading the price of a barrel of Brent crude fell by 3.2%. | |
'Special terms' | 'Special terms' |
Iraq's oil ministry is in favour of capping production. | Iraq's oil ministry is in favour of capping production. |
It said it was ready to commit to a production freeze if a deal was reached among other producers. | It said it was ready to commit to a production freeze if a deal was reached among other producers. |
But Iran's Mr Asali said to Shargh: "Asking Iran to freeze its oil production level is illogical... when Iran was under sanctions, some countries raised their output and they caused the drop in oil prices. | But Iran's Mr Asali said to Shargh: "Asking Iran to freeze its oil production level is illogical... when Iran was under sanctions, some countries raised their output and they caused the drop in oil prices. |
"How can they expect Iran to co-operate now and pay the price?" | "How can they expect Iran to co-operate now and pay the price?" |
It aims to raise its crude production and exports to one million barrels a day over the next six months. | It aims to raise its crude production and exports to one million barrels a day over the next six months. |
Two non-Iranian sources close to the Opec discussions told Reuters that Iran could be offered special terms as part of the output freeze deal. | Two non-Iranian sources close to the Opec discussions told Reuters that Iran could be offered special terms as part of the output freeze deal. |
'Not credible' | 'Not credible' |
There are doubts over the worth of the move. | There are doubts over the worth of the move. |
Paul Stevens, from the Royal Institute of International Affairs at Chatham House and an expert on the oil markets, said Tuesday's agreement had "no credibility whatsoever". | Paul Stevens, from the Royal Institute of International Affairs at Chatham House and an expert on the oil markets, said Tuesday's agreement had "no credibility whatsoever". |
He pointed out that Russia - not a member of the Opec cartel - had reneged on previous production agreements. | He pointed out that Russia - not a member of the Opec cartel - had reneged on previous production agreements. |
It last agreed to co-operate with Opec back in 2001, but never followed through on its pledge and raised exports instead. | It last agreed to co-operate with Opec back in 2001, but never followed through on its pledge and raised exports instead. |
In the face of competition from US shale producers, Saudi Arabia and its Opec allies in the Gulf have followed a strategy of raising production to protect market share rather than prices. | In the face of competition from US shale producers, Saudi Arabia and its Opec allies in the Gulf have followed a strategy of raising production to protect market share rather than prices. |
Tensions also remain between Saudi Arabia and Russia over Syria. | Tensions also remain between Saudi Arabia and Russia over Syria. |
Russia is supporting President Assad's regime, with help from Iran, while Saudi Arabia as the regional Sunni power is backing opposition forces. | Russia is supporting President Assad's regime, with help from Iran, while Saudi Arabia as the regional Sunni power is backing opposition forces. |