Iran Is In No Mood To Compromise On Oil Production Quota

Iran Is In No Mood To Compromise On Oil Production Quota

Iran is not in a particularly conciliatory mood when it comes to pumping oil. The Islamic republic has been vocal about the pains it suffered at the hands of the international community until recently for not allowing its oil to be traded in the global market.

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This was evident when the country said that it would take a hard line in the discussions among oil producers that sought to restrain production. Iran’s leadership said that the country would continue to accelerate output until it reached pre-sanctions levels. That is bad news for those who are trying to reach a consensus on freezing production levels.

Unreasonable To Seek Freezing Production

Iran’s envoy to OPEC, Mehdi Asali, told the Iranian media that asking the country to freeze oil production was unreasonable. He pointed out that when the country suffered from sanctions, other OPEC nations increased their output. As a result, this allowed oil prices to drop. Therefore, he sought to know how other countries were expecting it to cooperate and get paid for the situation it was not responsible for.

There were reports that three oil ministers from Venezuela, Iraq and Qatari have traveled to Iran to meet with with their Iranian counterpart, Bijian Zanganeh, to restrain oil output. One of the ideas was to freeze production at January levels so that the move could support the stabilization of the oil price, now below $30 a barrell.

First Deal In 15 Years

If a deal is reached among oil exporters, it would be the first deal in a decade and a half. However, Saudi Arabia put a rider that its acceptance was subject to other big producers agreeing to it. That was a clear indication that it would not risk losing its market share in case other nations failed to agree to a deal.

Before 2012, Iran was exporting approximately 2.5 million barrels a day of crude. As a result of the sanctions, exports were reduced it to 1.1 million barrels a day. A Reuters report said that its survey indicated that Iran produced 2.9 million barrels a day of oil in December. Asali said that it has been reiterating that it would only boost production.