Asking Iran to freeze oil output ‘illogical’

Iran’s OPEC representative says the country will continue ramping up oil production to reclaim its market share, a day after Saudi Arabia and Russia were said to have agreed on freezing output. 

The agreement turned attention to Iran which is in the midst of its bid to add 1 million barrels per day to its production by the end of the year to bring it to pre-sanction levels.

"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." Mehdi Asali was quoted Wednesday as saying by the Sharq daily.

Saudi Arabia stole a march on other OPEC members in producing well over its quota to replace Iranian barrels when Tehran had to slash its output by more than 1 million bpd under sanctions in 2012.

Iran has repeatedly called on those producers to return to their original levels but those calls have fallen on deaf ears so far.

On Tuesday, Saudi Arabia and Russia said they would freeze oil output at January levels if other major producers do the same, but did not commit to any production cut.

"How can they expect Iran to cooperate now and pay the price?" Asali asked.

"We have repeatedly said that Iran will increase its crude output until reaching the pre-sanctions production level," he added.

Venezuelan Oil Minister Eulogio Del Pino, Iraqi Oil Minister Adel Abdel Mahdi and Qatari Energy Minister Mohammad bin Saleh al-Sada were meeting their Iranian counterpart Bijan Zangeneh in Tehran Wednesday to discuss the matter.

"It requires discussion and examination to be seen what has been their point," the Ministry of Petroleum’s Shana news agency quoted Zangeneh as saying Tuesday.

"What is important is that, first, the market is oversupplied, and, second, that Iran will not overlook its quota," he added.

Some Iranians suspicious 

Reuters quoted two unnamed non-Iranian sources close to the OPEC discussions as saying that Iran might be offered special terms as part of an output freeze deal.

"Iran is returning to the market and needs to be given a special chance, but it also needs to make some calculations," the news agency quoted one source as saying.

Both Saudi Arabia and Russia are currently producing near record highs, which has left the market saturated with over 2 million bpd of additional oil.

Riyadh has played hardball in recent OPEC meetings, refusing to cut production because it apparently sought to drive high-cost shale oil out of the market.

Some experts have said the decision was more politically motivated, citing the kingdom’s hostility toward Iranian and Russian policies in Syria.

On Wednesday, some Iranians questioned the timing of Saudi Arabia’s submission to an output cap, saying it was prompted by Riyadh’s interest in thwarting the Islamic Republic’s bid to redeem its market share.

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