- Brent crude prices fall 24% this year amid supply glut
- Iran invested $10 billion in 2013, $6 billion in 2014
Iran, the world’s fifth largest crude producer, has set aside almost nothing for oil investments this year because of the drop in prices.
Money put into the industry dropped from about $40 billion for 2011 and 2012 combined to $6 billion last year, Iran’s Oil Minister Bijan Namdar Zanganeh said Tuesday, according to the ministry’s news website Shana. Brent crude prices slumped below $45 a barrel on Aug. 24 for the first time since 2009.
Iran’s oil industry needs $100 billion to $500 billion over the next five years, Iran’s state-run news agency IRNA reported on Aug. 3, citing Saeed Ghavampour, general manager of the oil ministry’s strategic planning. Oil producers such as BP Plc and Royal Dutch Shell Plc have expressed interest in developing Iran’s reserves, the world’s fourth-biggest, when sanctions are removed following last month’s nuclear agreement with world powers.
“Because of the drop in the price of oil, almost nothing has been set aside for investment in the oil industry this year,” Zanganeh said, according to Shana.
Iran pumped 3.6 million barrels of oil a day last year, down from 4.4 million in 2011, according to BP Plc data. The U.S. was the biggest producer at 11.6 million barrels a day, followed by Saudi Arabia at 11.5 million, Russia at 10.8 million and China at 4.2 million .
A global oil surplus estimated by Iran now at 3 million barrels a day has been maintained nine months after Saudi Arabia pressed the Organization of Petroleum Exporting Countries to hold production in the hopes that rivals would cut first. On Monday, Iran backed calls for an emergency OPEC meeting even as it repeated plans to boost its own production as soon as international sanctions end.
OPEC is pumping at near record levels, even amid a global glut of crude. Algeria wrote to others in the 12-member group saying they should consider measures for reviving oil prices and stabilizing the market, two delegates familiar with the request said last week. OPEC is scheduled to meet Dec. 4 in Vienna.
Zanganeh said Iran will increase output by 500,000 barrels a day after sanctions are lifted, and another 500,000 barrels after that.
“We will be restoring our 1 million barrel per day market share after sanctions lift, lost because of the imposition of the sanctions,” he said, according to state-run news agency IRNA.
OPEC produced 32.1 million barrels a day of crude in July. Zanganeh has said that other OPEC members should make room for Iran when it raises output after sanctions are lifted as a result of last month’s nuclear pact with world powers. Iran pumped 2.85 million barrels a day in July, down from 3.6 million at the end of 2011, data compiled by Bloomberg show.