Iran: Global Oil Market Has Sufficient Supplies

A0354584.jpgIran believes there is enough oil in the global market but is capable of pumping more into it if the figures warrant and if there is agreement by OPEC to do so, Oil Minister Gholam Hossein Nozari said. “We believe there is enough oil in the market but if statistics and data show there is a need to produce more we are capable of meeting the demand,” Nozari told a news conference in Tehran on Saturday.

When asked whether Iran agreed with a possible decision to increase the Organization of Petroleum Exporting Countries’ output, he said “we are studying it and will give our opinion.”

But he said any hike “should be in final agreement with other members” of the 13-member cartel, whose oil ministers meet in Abu Dhabi next month.

OPEC last decided to raise output in September when they agreed to provide an extra 500,000 barrels a day to the market, effective November 1.

Despite pressures from developed countries, no decision was made at a rare OPEC summit this week.

Although some OPEC ministers expressed concern that expensive crude would eventually dampen demand for oil, they indicated that blame for the near triple-figure price lay outside the cartel and mostly pertained to the depreciation of the value of the US Dollar.

Ministers in Abu Dhabi are expected to discuss output policy, with any breach of the 100-dollar level before then likely to heap pressure on the group to act.

On Friday, New York’s main contract, light sweet crude for January delivery, rose 99 cents to a record close of $98.18 per barrel. The contract had hit a historic intraday record high of $99.29 on Wednesday.

US hues and cries about Iran’s nuclear program, which Iran insists is aimed at peaceful means, have resulted in soaring prices.

Speaking on the sidelines of last week’s OPEC summit, Iranian President Mahmoud Ahmadinejad alluded to the possibility of Iran suspending its oil exports if the US “took action” against the country.

Iran holds a 14.7-percent share of OPEC output, the biggest after Saudi Arabia.

Nozari also said the country will increase its crude production by the end of its current calendar year (March 2008).

“We currently produce 4.145 mln bpd and our production capacity stands at 4.3 mln bpd,” he said, adding that the country targets “a sustainable daily crude oil production of 4.2 mln by the end of the current year”.

The country’s current OPEC quota stands at 4.15 mln bpd.

Iran, benefiting from the record oil prices, expects to pocket $60 bln from oil sale in its current year, Nozari said.

Despite long-term plans to increase oil output, pressure falls in oil wells have prevented Iran from increasing production capacity to five mln bpd.

US pressures have made some western companies show reluctant to carry out energy projects in Iran, but many Asian oil giants and also domestic companies are implementing the projects very well.

The Azadegan, Hengam and Yadavaran fields, whose foreign joint investment failed, are now under operation by Iranian contractors.

“We will not delay any of our projects awaiting foreign companies,” Nozari said, “even though we prefer to negotiate with any international company while preserving our interests.”

Pointing to US pressures and sanctions over Iran’s defiance in freezing its nuclear activities, Nozari said Iran has shifted its market from Europe to Asia.

“It is possible that some Western countries under the influence of the United States would negotiate with us cautiously. We have anyway adopted an Asian approach that has opened the way for us.”

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