Iran’s Oil Minister has spoken to euronews in an interview to be broadcast in full next week.
But in the wake of the latest meeting of OPEC, he was quick to react to the failed attempt by some members to scale back production and raise prices.
OPEC’s decision is not good for Iran, even if OPEC says it will be exempt from any future cuts so would be able to sell unlimited amounts at a new higher price. But that seems far away.
“The issue of ‘market share’ has been one of the important historical concerns of OPEC. In recent years, OPEC’s share in the global market has constantly declined,” said Bijan Namdar-Zanganeh
Following this week’s Vienna meeting, some analysts say that the cartel’s days of ruling world prices are over, with profound implications for the market, which is busy reasserting control.
“Certainly, if OPEC production goes lower than a certain level, its impact will become minimal. It is a determining factor to see what is the reasonable price for OPEC, so that, while maintaining its share of the market, the member states can also have enough income in order to run their countries and make the investments necessary for increasing their production,” said Bijan Namdar-Zanganeh.
OPEC is only as strong as the unity of its members, who in the past have been known to flout quotas and break the rules, but with so much new non-OPEC production the game has changed:
“There should be consensus on every decision. When there is a discussion about lowering output, of course the role of Saudi Arabia is very important but then again, when that happens, Saudi Arabia is the one who loses most,” said Bijan Namdar-Zanganeh.
The Saudis may be losing cash with low prices, but they have plenty, and at the moment OPEC has more political than economic value for them.
For Iran, a low price means a budget revised down from forecast barrel prices of $100 to $60-$70.